The contemporary urban functioning of cities requires adaptability and progressive development guided by the Sustainable Development Goals (SDG) that can be adjusted to local circumstances and needs. Currently, the small border towns in the Republic of North Macedonia (RNM) are facing numerous problems on social, economic and ecological levels (e.g., economic inequality, the unemployment and social isolation of citizens, the insufficient implementation of planning documents, the inadequate physical and functional structure of public spaces, the lack of environmental plans, improper waste management, etc.), which have influenced the efficiency and sustainability of their systems. Therefore, urban transformations are necessary due to the alarming reduction in the working-age population and the general stagnation which these towns experience. The aim of this article is to define possible solutions and recommendations for the ongoing urban challenges and transformations based on the performed analysis of the primary data sources, especially targeting the psychological and behavioral levels of identified problems, the culture of living and the management policies of local governments. The main research method used in the study was the AQAL method (all quadrants, all levels), which provided a comprehensive perspective of the current urban problems and conditions combined with a comparative analysis within an integrated framework. The application of these methods enabled the identification of the specific problems in the border towns, as well as the means and capacities for solving them, while simultaneously addressing the shortcomings and opportunities for urban renewal. By understanding the different viewpoints provided by the AQAL method, local governments, planners and policymakers can create adaptable urban models that can accommodate and overcome future changes and obstacles generated by contextual limitations. The obtained research results represent a starting point for the development and improvement of local sustainability through the advancement of economic innovations, environmental practices and social relations. Furthermore, specific recommendations are provided, directly and indirectly targeting the specificities of the selected towns, their urban development and management, as well as their future environmental and social sustainability.