The transformation of cities towards sustainable development is steered by municipal administrations, supported by the citizenry, local businesses, and social and cultural institutions. This chapter primarily deals with the state laws and regulations, norms and standards, informal concepts and guiding principles, and the tax and funding system that must be considered in the transformation. It also elaborates on the independent legal and economic options available at the municipal level. In particular, climate protection policy leads to further developed legal requirements at all levels. Urban and spatial planning is both challenged to implement climate protection goals in the structural and infrastructural development, and to take precautions to ensure a healthy and high-quality life in cities and municipalities in the face of advancing climate change. The energy renovation of buildings, which among other things serves climate protection, has implications for rental relationships. Especially in the residential building stock, tenancy law and state funding policy face the task of ensuring a distribution of burdens between owners and tenants. Under the heading “Local Governance”, the options for action of municipalities and many other actors in the municipalities are described. A significant instrument of financial municipal self-administration are the apportionment systems for financing local infrastructure. The instrument of sustainability reporting, which is increasingly becoming a mandatory task for companies and organizations, represents a broad and intensive learning process in society about the necessity to develop individual sustainability goals in many individual areas of action and to systematically pursue their implementation.