Development in northern Russian cities is determined by specific economic and social conditions, as well as by natural and climatic factors. Most of these cities were established in the period of the Soviet industrialization and, thus, have a mono-profile character; for that reason, economies of single-industry cities pose high development risks of the “boom-bust” type and the relevant social problems. This paper endeavours to discuss these issues, relying on the case study of Kirovsk (Murmansk region) in order to analyse the urban planning aspects and challenges on the way to sustainability. The main factors (e.g. socio-economic, environmental and land use, institutional) were analysed to learn how they may contribute to sustainable development of Kirovsk as a single-industry town. The role of different stakeholders (mining companies, local communities, and government authorities) in decision making process is discussed. The paper presents the potentials and challenges for a further development of Kirovsk and studies its chances to become a sustainable town. Most challenges are connected with structural and paradigm changes in economy and functionality of enterprises after the collapse of the Soviet Union. Among them are contradictions of interests (e.g. ecological: enterprise owners – citizens), downsizing and depopulation, domestic and foreign market situation, environment pollution and degradation as well as associated health problems linked to the quality of life of the local population. The paper argues that following the long history of industrialization the mining activity is still dominant and has a great influence on the everyday life of urban dwellers. However, Kirovsk also has opportunities to become a sustainable town based on tourism development potential and innovations, development towards environment saving technologies conducted by scientific institutes located there. In addition, participatory approaches (e.g. public participation, involvement of stakeholders and activism of local NGOs) in urban management allow the linkages to be made among specific forms of land use, its management and policies.