The aim of this publication is to improve the environmental life cycle assessment methodology for buildings by incorporating damage to the health of occupants of emissions from building materials and local traffic. It also intends to determine the overall impact reduction by building environmentally improved dwellings. This reduction is referred to as the so-called factor X for dwellings. A methodology has been developed to calculate damages to human health caused by pollutants emitted from building materials or from the soil to the indoor environment. The dwelling used in the calculations is divided in three compartments: crawl space, first floor and second floor. Fate factors are modeled based on indoor and outdoor intake fractions or on dose conversion factors. Effect factors are calculated from unit risk factors. Damage factors are expressed in terms of disability adjusted life years (DALYs). Characterization factors have been calculated for 36 organic compounds, radon and gamma radiation emitted by building materials applied in a Dutch reference dwelling. Health effects due to indoor exposure to pollutants emitted from building materials appeared to be dominant in the characterization factors over outdoor exposure to such pollutants. The health effects of emissions of organic compounds into the crawl space are very small, compared to the health effects of emissions into the other compartments.