Prefabrication has been widely adopted in the construction projects in recent years. It has also been advocated as a greener and more sustainable approach of project delivery. However, with a wealth of evidence supporting other reasons as the drivers of using prefabrication, it is questionable whether the real goal of prefabrication is to achieve sustainable construction. This study aims to investigate the roles of prefabrication in fostering sustainable construction. The effectiveness of prefabrication on fostering sustainable construction was evaluated on the five aspects enlisted by the UK’s Green Construction Board: Waste, Water, Carbon, Materials, and Biodiversity. An industry survey was conducted in Melbourne, Australia for data collection. 200 questionnaires were sent via email or post to a variety of fields within the construction industry. Entropy ranking analysis was adopted to analyze the effectiveness of using prefabrication in construction. The results suggest that prefabrication is effective in reducing construction waste and sourcing energy efficient materials. However, the utilization of prefabrication was found unsuccessful in reducing carbon emissions during the construction process. It is suggested that proactive actions should be taken at the design stage to unleash the potential of prefabrication in construction.