This study injects sustainability into competitiveness to inform policy making and planning for contemporary urban development. This is built upon the recent advancement in the scholarship on urban competitiveness that demonstrates a clear deviation from an economic-centric approach to incorporate multiple dimensions of a city's progress. This study has an explicit concern for environmental sustainability and its relationship with urban competitiveness and their conceptual and methodological articulations. Empirically, this study measures the sustainability and competitiveness in Australian cities and reveals that Australia's urban progress is clearly associated with an environmental cost. The findings are useful to inform policy making and planning for building sustainable and competitive cities. Apart from the conventional solutions that focus on urban form change and transport infrastructure improvement, this study suggests a need to explore the opportunities deriving from the emerging smart city planning and practice.