In a preferred embodiment, a modular lavatory system for replacing a conventional lavatory monument in an aircraft cabin includes a base lavatory module including a fore sidewall, an aft sidewall, and an aisle wall that form a housing enclosing a toilet unit. A first sidewall of the fore sidewall and the aft sidewall may include a widening region positioned above a passenger seat headrest height. The modular lavatory system may include at least two interchangeable modules configured for mounting against the other sidewall of the base lavatory module. A footprint of the base lavatory module may be smaller than the conventional lavatory monument footprint, such that an extra cabin space is created proximate the other sidewall of the base lavatory module after replacement of the conventional lavatory monument with the modular lavatory system. The at least two interchangeable modules may each be dimensioned for installation within the extra space.