Recently, more attention has been devoted to Prefabricated Buildings (PBs) as an alternative technique for developing building sustainability. Due to a great deal of discussion about the link between environmental and economic performance and a lack of critical review relating the PBs to these two aspects, the main focus of this research is on the environmental and economic performance of PBs. Using a systematic search and critical literature review, this paper reviews the significant studies in this area and discusses corresponding assessment methods, systems boundaries, recommended methods, and research gaps. It is concluded that, on average, environmental dimensions of PBs have been studied more than economic ones and with more certainty. It was also recommended to assess the economic profitability of PBs in a long-term period utilizing various measurements. The contribution of this study can be summarized by 1) providing a deeper insight into both the environmental and economic performance of PBs, and 2) identifying the research gaps and future research directions.