This study assesses the economic and environmental impacts of incorporating sugar cane bagasse (SCB) bio-oil (BO), particularly BO derived from sugar cane waste, as a partial replacement for bitumen in asphalt pavement construction. The research focuses on evaluating material costs, construction costs, production costs, and life cycle cost analysis (LCCA) alongside environmental considerations. Four different percentages of BO (0%, 3%, 6%, and 9%) were evaluated. Total material costs rise with the percentage of BO replacement, while construction costs decrease. Production costs also increase across different higher replacement percentages of BO. The total life cycle cost of asphalt pavements decreases as the percentage of BO increases. Higher BO replacement percentages lead to reduced carbon emissions, indicating improved environmental sustainability. Incorporating BO offers potential cost savings in bitumen expenses, with greater reductions observed at higher replacement percentages. This study emphasizes the significant potential of BO for enhancing the economic, environmental, and social sustainability of asphalt pavement construction.