Extreme environmental conditions, sparsely distributed human populations, and diverse local economies characterize the Russian Arctic and Far East. There is an urgent need for multidisciplinary research into how the Arctic and Far East can be developed sustainably as global changes in the environment and the economic priorities of nations accelerate and globalized societies emerge. Yet, when it comes to sustainability indicators, little consideration has been given thus far to sparsely populated and remote territories. Rather, the majority of indicators have been developed and tested while using empirical research gathered from cities and densely populated rural localities. As a result, there is no scientific technique that can be used to monitor the development of sparsely populated territories and inform the decisions of policymakers who hope to account for local specificity. This article suggests a conceptual model for linking sustainability to the unique characteristics of the sparsely populated regions of the Arctic and Far East. We provide an empirical illustration that is based on regional-level data from the sparsely populated territories of the Russian Federation. We conclude by suggesting indicators that could be best suited to promoting balanced regional development that accounts for the environment, economy, and social needs of sparsely populated territories.