Highway pavement is a critical component of the highway transportation infrastructure. After the construction of a pavement system, pavement condition will deteriorate over time due to a combination effect of material aging, traffic loading, and environmental factors. As pavement condition deteriorates, vehicle operating costs and their corresponding environmental impacts would increase significantly. To restore the pavement performance and to reduce its adverse effects on public users and environment, asphalt overlay activities are conducted frequently during the service life of a pavement. Meanwhile, asphalt overlay itself consumes large amounts of energy and natural resources. The purpose of this research is to guide highway agencies to optimize flexible pavement overlay strategies using the integrated cycle assessment (LCA) - life cycle cost analysis (LCCA) approach. In the study, a post-overlay pavement roughness progression model in terms of international roughness index (IRI) is firstly developed to evaluate the effect of asphalt overlay design factors on pavement roughness progression. Then, by incorporating the proposed post-overlay IRI model in the integrated LCA-LCCA framework, the life cycle environmental and economic impacts of different overlay strategies are evaluated. Finally, a multi-objective optimization framework is proposed for identifying the eco-friendly and cost-effective asphalt overlay strategy. Based on the comparative analysis results, the inclusion of 30% reclaimed asphalt pavement (RAP) in asphalt overlay is found to reduce life cycle energy consumption, greenhouse gas (GHG) emissions, criteria air pollutants, and life cycle costs. For asphalt overlay projects, pavement surface roughness effects, construction activity, and material production are three major contributors to life cycle energy consumption and GHG emissions. The usage phase vehicle operating costs and agency costs are two dominant factors in the LCCA of different asphalt overlay strategies. Based on a sensitivity analysis, traffic level and IRI trigger value for asphalt overlay have a significant effect on the life cycle environmental and economic sustainability of overlaid pavements.