<p>Urbanization provides a range of benefits, including economic growth, social advancement, political development, and an improved quality of life. However, it also brings several challenges associated with urban environments. While urbanization contributes to changes in land use and land cover, it also exacerbates overall environmental degradation. Gilgit is a rapidly urbanizing city and one of the most popular tourist destinations in Pakistan, due to its scenic beauty and natural landscape. Unfortunately, this mountain community is also highly susceptible to climate-induced natural hazards. Therefore, this paper examines the impacts of rapid urbanization and climate change on the overall well-being of citizens and environmental sustainability. This study employed the Driver-Pressure-State-Impact-Response (DPSIR) Framework to analyze urbanization, followed by a land cover analysis spanning the past twenty years to elucidate urbanization trends and their subsequent impacts on climate and the local community. In the context of urbanization and climate change, semi-structured expert interviews and a detailed literature review were conducted to identify the components and determinants of the DPSIR framework. The analysis reveals that the built-up area of the city has increased significantly. The findings further indicate that population growth, combined with land-use change, accelerates urbanization, placing a significant strain on natural resources, increasing tourist influx, and negatively contributing to the region's growing vulnerability to multi-hazards. In response, the efforts of the concerned authorities remain insufficient to address these urban challenges. This study advocates for planned urbanization through improved city planning and building regulations to make Gilgit more sustainable and climate-resilient. The outcomes of this study can benefit urban planners, environmentalists, and policymakers in curbing urbanization and ensuring climate-resilient and sustainable development.</p>