This chapter explores the integration of AI-driven Extended Reality (XR) technologies in enhancing environmental sustainability. It highlights their applications in urban settings, focusing on waste management, energy optimization, and public engagement. Through a case study of Greenfield, a mid-sized city, the chapter presents quantitative analyses demonstrating significant improvements in efficiency, cost savings, and citizen participation in sustainability initiatives. The findings reveal the transformative potential of combining AI and XR to address pressing environmental challenges while fostering community involvement. Additionally, the chapter discusses ethical considerations and the need for interdisciplinary collaboration to ensure equitable outcomes. Looking ahead, future research directions emphasize the importance of long-term studies, policy analysis, and the exploration of emerging technologies. Ultimately, this chapter underscores the critical role of AI and XR in driving sustainable urban development and promoting a culture of environmental stewardship among citizens.