Global water security is a severe issue that threatens human health and well-being. Finding sustainable alternative water resources has become a matter of great urgency. For coastal urban areas, desalinated seawater could serve as a freshwater supply. However, since 20%–30% of the water supply is used for flushing waste from the city, seawater with simple treatment could also partly replace the use of freshwater. In this work, the freshwater saving potential and environmental impacts of the urban water system (water-wastewater closed loop) adopting seawater desalination, seawater for toilet flushing (SWTF), or reclaimed water for toilet flushing (RWTF) are compared with those of a conventional freshwater system, through a life-cycle assessment and sensitivity analysis. The potential applications of these processes are also assessed. The results support the environmental sustainability of the SWTF approach, but its potential application depends on the coastal distance and effective population density of a city. Developed coastal cities with an effective population density exceeding 3000 persons·km⁻² and located less than 30 km from the seashore (for the main pipe supplying seawater to the city) would benefit from applying SWTF, regardless of other impact parameters. By further applying the sulfate reduction, autotrophic denitrification, and nitrification integrated (SANI) process for wastewater treatment, the maximum distance from the seashore can be extended to 60 km. Considering that most modern urbanized cities fulfill these criteria, the next generation of water supply systems could consist of a freshwater supply coupled with a seawater supply for sustainable urban development.