This study examines the causal relationships among technology acceptance, Industry 4.0 readiness, smart manufacturing capability, and environmental performance in recycling enterprises in Thailand. The study employs a quantitative research design using a structured questionnaire administered to employees and managers of recycling enterprises. Data are analyzed using exploratory factor analysis, confirmatory factor analysis, and structural equation modeling to assess the measurement model and hypothesized relationships. Semi-structured interviews are also conducted to provide qualitative insights into digital transformation. The findings indicate that technology acceptance, organizational readiness, and leadership support are important drivers of digital transformation. Technology acceptance and Industry 4.0 readiness positively influence smart manufacturing capability, which improves environmental performance through greater operational efficiency, resource optimization, waste reduction, and environmental compliance. Smart manufacturing capability also mediates these relationships. The study demonstrates that integrating behavioral, organizational, and technological capabilities can strengthen sustainable performance in Thailand’s recycling industry. Practical Implications: The findings provide guidance for managers and policymakers to strengthen organizational readiness, leadership support, and technological capabilities, thereby accelerating Industry 4.0 adoption and promoting environmentally sustainable industrial development.

