The increasing use of traditional agricultural plastic mulch films (PMs) has raised significant environmental concerns, prompting the search for sustainable alternatives. Soil-biodegradable mulch films (BDMs) are often proposed as eco-friendly replacements; however, their widespread adoption remains contentious. This review employs a comparative life cycle assessment perspective to evaluate the environmental impact of PMs and BDMs across their production, use, and end-of-life stages, providing strategies to mitigate their impact on agroecosystems. BDMs generally exhibit lower energy use and greenhouse gas emissions than PMs but contribute to greater land-use demands. Reported eutrophication and acidification potentials are less consistent, varying based on feedstock types and the scope of assessment of BDM, as well as the end-of-life management of PM. The environmental burden of both mulch types is influenced by the life cycle stage, polymer composition, farming practices, additives, film thickness, and local climatic conditions. The manufacturing stage is a major contributor to energy use and greenhouse gas emissions for both PMs and BDMs, despite their shared benefits of increasing crop yields. However, post-use impacts are more pronounced for PMs, driven by end-of-life strategy and adsorbed waste content. While starch-based BDMs offer a more sustainable alternative to PMs, uncertainties regarding the residence time of BDM residues in soil (albeit shorter than PM residues) and their effects on soil health, coupled with higher production costs, impede widespread adoption. For BDM end-of-life, soil biodegradation is recommended. Energy and material recovery options are crucial for PM end-of-life, with mechanical recycling preferred, although it requires addressing eutrophication and human toxicity. This review discusses these complexities within specific contexts and provides actionable insights to guide the sustainable integration of mulch films into agricultural practices.