The development of environmental performance policy indicators for public services, and in particular for the defence sector, is an emerging issue. Despite a number of recent initiatives there has been little work done in this area, since the other sectors usually focused on are agriculture, transport, industry, tourism and energy. This type of tool can be an important component for environmental performance evaluation at policy level, when integrated in the general performance assessment system of public missions and activities. The main objective of this research was to develop environmental performance policy indicators for the public sector, specifically applied to the defence sector. Previous research included an assessment of the environmental profile, through the evaluation of how environmental management practices have been adopted in this sector and an assessment of environmental aspects and impacts. This paper builds upon that previous research, developing an indicator framework--SEPI--supported by the selection and construction of environmental performance indicators. Another aim is to discuss how the current environmental indicator framework can be integrated into overall performance management. The Portuguese defence sector is presented and the usefulness of this methodology demonstrated. Feasibility and relevancy criteria are applied to evaluate the set of indicators proposed, allowing indicators to be scored and indicators for the policy level to be obtained.