A key dimension to improving urban economic and environmental sustainability is the efficient use of resources through recycling. A thriving recycling system requires not only effective institutional policies and community-wide diversion efforts, but also a competent local and regional recycling industry. Although the recycling industry has traditionally been recognized as a local service and fringe industry, it has noticeably transformed into an integral segment of industrial production systems as manufacturers have increasingly begun to adopt the principle of extended producer responsibility. Despite such changes, urban and regional theory and planning research has largely disregarded the industrial aspect of recycling, contributing to the dearth of information about the organizational and spatial patterns of the recycling industry and the impact of the establishment of recycling systems on local and regional scales. Given the knowledge gap, this dissertation addresses two questions: 1) What is the logic of the industry organization and spatial pattern of recycling industry in different institutional contexts? and 2) How is the economic and environmental impact of recycling systems determined in cases of construction and demolition waste recycling and waste carpet recycling? To answer the first question, this research develops a theoretical model that explains how recycling industrial activities are spatially distributed in light of institutional and organizational theories. The theoretical model characterizes organizational decisions pertaining to recycling functions and suggests spatial patterns of recycling systems. With respect to the second question, this research constructs a regional environmental input-output model on the metropolitan scale. It estimates regionalized energy use coefficients and greenhouse gas emission coefficients using various sources of data mainly compiled from the Manufacturing Energy Consumption Survey 2006, the State Energy Consumption Estimates, and the Commodity Flow Survey 2007. Based on regional input-output tables coupled with the regionalized environmental coefficients, this research quantifies, through simulations, the net economic and environmental impact of a localized construction and demolition waste recycling system in the San Francisco metropolitan area and regional carpet recycling systems in the Atlanta and Seattle metropolitan areas. Results of the simulations reveal that 1) the localized construction and demolition waste recycling system provides moderate economic benefits because of the limited job creation potential of mechanized recycling processes and yields relatively small environmental benefits with respect to the total weight processed; 2) wider adoption of the deconstruction technique expands job opportunities, increases energy savings, and reduces greenhouse gas emissions during the course of construction and demolition waste recycling; 3) regional-scale waste carpet recycling systems, in particular recycled nylon 6 production, create sizable new job opportunities and provides environmental benefits of energy savings and greenhouse gas emission reduction despite the long-distance transportation of waste carpet. These results suggest that policies that promote recycling industrial activities can significantly contribute to the economic and environmental sustainability of metropolitan areas.