Urban renewal in Hong Kong plays an important role in stimulating local economy by optimizing development potential of disturbed site and introducing new activities|businesses with large profit margins. However, past and current urban renewal practices put too much emphasis on achieving economic objectives, and overlook the environmental and social needs of the community, which violates the global trend to promote sustainable development in the urban areas. In view of it, this paper has reviewed the property-led| market-led urban renewal approach continuously adopted in Hong Kong, and suggested a more sustainable approach to meet economic objectives. In order to facilitate such approach, this paper has highlighted a list of urban design considerations contributing to sustainable development and identified key design factors improving economic sustainability of the urban renewal projects. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.