The search for sustainable development provides the impetus for examining the role of indigenous institutions and their ecological knowledge in environmental assessment and local sustainability. This paper attempts to trace the evolution of environmental assessment in Ghana. Focusing on the Ashanti Region, the paper further discusses the nature and operations of indigenous institutions, their ecological knowledge, beliefs, practices, and social norms that are relevant to environmental assessment process in the country. Some of the challenges that emerge from the discussions are highlighted. There is a need to establish environmental assessment and cooperative management boards that would include representatives of indigenous institutions, in addition, the introduction of technical dictionaries and training manuals based on indigenous ecological knowledge and their humane environmental practices will further improve the environmental assessment process in Ghana.