Sustainable urbanization is a challenge to human beings in the modern era of technology. Cities all over the world are facing several problems due to urbanization and industrialization. Urban problems could be assessed through development of indices of urban sustainability on the basis of its three dimensions: environment, economics and social. The present study was conducted to identify indicators to develop indices for assessment of sustainability in some populated cities of Punjab. The study focused on the indicators based on environmental, economic and social development to develop a rational indicator system on the basis of secondary data collected from 2004 to 2014. A total of 40 indicators were identified to assess the urban sustainability progress in Lahore, Rawalpindi, Multan, Gujranwala and Faisalabad cities. The result of the sub-indices indicated that poor performance was evident in the environmental sector, rather than in the economic and social sectors. The cities scored between 0.27 and 0.58 in environmental dimensions, showing a decreasing trend from 2004 to 2014. The declining trend of indices was due to population influx, rapid urbanization, reduction in green areas, industrialization, high level of atmospheric and water pollutants. In case of the economic sector, an increasing trend was observed which indicates the gradual improvement in living standards of people. In the social dimensions of the indicator system, less variations were observed among the cities and ranged between 0.49 and 0.58. Overall, the results of the urban sustainability index showed score was ranges between 0.41 to 0.52. None of the Punjab cities attained the position as a sustainable city (0.75) Lahore (0.52) and Faisalabad (0.52) were ranked as moderately sustainable cities, whereas, Rawalpindi (0.48), Gujranwala (0.47) and Multan (0.41) were ranked as weak sustainable cities. The study highlighted that the urban sustainability indicator system could be useful to determine the existing sustainability in cities of the developing countries for better resource management practices.