Environmental issues in the process of rapid urbanization are critical to the sustainability of China. Compact cities, characterized by relative high density, mixed land-use and pedestrian-oriented habitation, have been proposed as one solution for sustainable urban planning. However, given the fact that Chinese cities are characterized by high population densities, the applicability of a more compact solution to expanding cities in China remains questionable. Essential to the decision-making is a deeper understanding about the relationship between urban compactness and the sustainable environment of the cities. This study is proposed for an evaluation about the urbanization and urban development in China's context from environmental perspective, especially with respect to atmospheric environment, water resources, waste pollution, and noise problems.