For the first time a new QbD-assisted green stability indicating ultra-high-performance liquid chromatography (UHPLC) method was developed and validated for quantifying Tolvaptan. The method is simple, quick, cost-effective, and stable, and it was used to formulate a quality target product profile (QTPP) with strategically defined critical analytical attributes (CAAs) to meet specific criteria. Chromatographic separation was undertaken using a 10 cm long column of ACE excel super C18 with an interior diameter of 2.1 mm and particle size of 1.7 µm. The analysis was performed under controlled conditions at 25 ℃ with the mobile phase flowing at a rate of 0.2 mL/min and detection occurring at 220 nm. Injected 3 µL of standard by using an isocratic mobile phase system consisting of acetonitrile and water in a 95:5 v/v ratio. The diluents, prepared by mixing acetonitrile with water at a 90:10 volumetric ratio, were utilized. The analyte’s retention time was determined to be 1.63 min. The developed method provided reliable results with accuracy exceeding 99% and a correlation coefficient exceeding 0.999 ranged between 10 and 150 µg/mL across the range for LOQ—150% levels. Notably, during forced degradation testing, Tolvaptan exhibited susceptibility to acidic hydrolysis. The method effectively separated degradation products during stress testing, demonstrating its stability-indicating status. Environmental sustainability assessment of the developed method was conducted through the investigation of various indicators of Complex GAPI, Analytical Eco scale and Analytical GREEness and it was concluded the optimized method aligns with environmentally friendly practices.