The closing of material loops is a critical challenge in industrial ecology. It relies mainly on the utilization of recovered materials/ parts/products in the original and principal production system while their original function is retained at the highest level possible. In this study, advanced loop-closing systems for the recycling of end-of-life vehicles and electric household appliances are first designed in "Hyogo Eco-town." Second, a methodology for evaluating the eco-efficiency of these systems is developed. Finally, the eco-efficiency of the designed advanced loop-closing strategies for the two products is evaluated, based on the results of materials flow analysis and life-cycle assessment. The results show that, compared with conventional recycling systems, when an industrial complex and an advanced loop-closing system for end-of-life vehicles are established, the total economic value increases by 114% and the eco-efficiency in terms of the amount of direct material input is improved by 57%. This system permits the utilization of the by-products, wastes, and recovered materials that originate from other industrial sectors as input to production activities. In the case of end-of-life electric household appliances, an advanced loop-closing strategy to lengthen the product life with parts reuse improves the eco-efficiency in terms of carbon dioxide (CO 2) emissions by 4% compared with the conventional replacement of the appliance with a new product along with the material recycling option. © 2005 by the Massachusetts Institute of Technology and Yale University.