Improving their environmental performance enables contracting companies to decrease costs and increase their profit margins thus gaining competitive edge in international markets, besides contributing to improving of the environment. Research points to the necessity of selecting environmental performance indicators that are appropriate for the type of activities and the performance targets. Currently, however, no broadly accepted, comprehensive environmental performance assessment approach exists that is particularly suited to the activities of contractors. In this research, suitable indicators for the assessment of environmental performance of contractors and their relative weights have been determined through a staged-approach involving interviews, field surveys and case studies, and the environmental performances of the Turkish contractors are analyzed in various aspects based on these indicators. Strategies are proposed, in the light of the findings of the study, to ameliorate the environmental performance of the building industry.