The production of dairy products generates several environmental impacts, and life cycle assessment (LCA) is a useful methodology to quantify and understand those impacts. In Brazil, some traditional dairy products have not yet been evaluated using the LCA methodology. Based on this gap, we conducted a cradle-to-gate LCA of six dairy products from a plant in Minas Gerais, Brazil. We also performed two sensitivity analyses. The first analysis was on how the environmental profiles of the products changed depending on how the multifunctional processes were allocated. The second analysis evaluated how these changes in environmental profiles occurred depending on the way that the impacts were allocated to products and by-products (whey and buttermilk) produced within the dairy factory. Among the dairy products studied, the impacts of mozzarella cheese and butter substantially surpassed those of other products; cheese spread and dulce de leche had a similar impact; and yoghurt and milk had the lowest values for the impact categories that were assessed. The inclusion of by-products in the analysis proved to be an effective way to reduce the environmental impacts attributed to the dairy products, especially for cheese and cheese spread, the impact values of which decreased by 56% and 46%, respectively. Additionally, the use of different strategies to deal with the multifunctional processes significantly affected the impact results of the dairy products. The subdivision of processes combined with causal allocation was the best alternative as opposed to the allocation by milk solids. These results could offer a better understanding of the environmental profiles of dairy products from Brazil, especially the traditional products, such as dulce de leche and cheese spread. Other contributions of this study include the proposal of alternatives that could improve the environmental profiles of products (such as the processing of by-products and the questioning of the use of allocation according to milk solids, which have been commonly used in other life cycle assessment studies) and the proposal of a better method for assessing the environmental impacts of dairy products.