With the various applications of unmanned aerial vehicles (UAVs), the number of UAVs will increase in limited airspace, leading to an increased risk collision. To reduce such potential risk, this work proposes a collision avoidance strategy for UAVs using an enhanced potential field (EPF) approach in cluttered three-dimensional urban environments. Using the EPF formulated in a two-dimensional environment, the avoidance maneuvers for both horizontal and vertical planes are generated by introducing rotation matrices, and these maneuvers are combined by applying a weighting factor. The numerical simulations with various meaningful scenarios are conducted to validate the performance of the proposed approach. To mimic practical situations, UAV dynamics and sensor limitations were considered. The simulation results show that the proposed approach provides an efficient, reliable, and collision-free path without local minima and unreachable goal issues.