China’s paper production reached 79.8 ×10 t in 2008 and ranked number one in the world. Because of its high consumption of water, energy and materials and its serious pollution, the present processes are not likely to be sustainable. An alternative, the closed Water Loop-Papermaking Integration (WLPI) method, is put forward in this paper. The WLPI method can be realized in a recycled paper mill by adding technologies and using recycled water. Many industrial case studies have shown that a large quantity of water, energy and materials can be saved, and the quantity of waste sludge and wastewater discharge was minimized by using the WLPI method. The design of the water reuse system, control of calcium hardness, water recycling and minimal waste sludge are discussed. Anaerobic technology plays an important role in the WLPI method to lower cost, energy use and waste. In the brown paper and coated white board production, zero-effluent discharge can be realized. Fresh water consumption is only 1–2 m ·t . For the paper mills with deinking and bleaching processes, about 10 m ·t of fresh water and a similar amount of effluent discharge are needed. Power saving using anaerobic technology is 70% when recycled water is used in comparison with the conventional activated sludge process. Waste sludge can be decreased to about 5% of the initial process due to reuse of the waste sludge and the lower bio-sludge production of the anaerobic process.