Small and Medium Enterprises (SMEs) play a vital role in Malaysian economy. They are considered to be the backbone of industrial development in the country. However, the developments, challenges and prospects of SMEs in accepting the life cycle thinking perspectives have not been investigated thoroughly. This paper discusses the Life Cycle Assessment (LCA) related to developments in Malaysia and identifies the SMEs challenges during implementation of LCA based on publications and self-experience in conducting the LCA studies. There are a total of five main challenges of LCA implementation in SMEs; lack of awareness and participation, lack of government assistance and directive, short life-span of SMEs and the constraints on Malaysian SMEs. In addition, a possible driver of LCA implementation is the development of national life cycle inventory database which may reduce the cost and time of LCA data collection, and promote the implementation of LCA in Malaysian SMEs in a comprehensive and systematic manner.