The fast-evolving scenario of the global economy of the past few decades has contributed to the transformation of cities into prime economic hubs providing sustenance for the growing urban populace. In keeping pace with economic development and subsequent demand for shelter, cities are densifying through vertical expansion to avoid urban sprawl. Given the rapid urbanization along with the scarcityof developable urban land, open spaces have become a highly contested commodity, particularly in the residential of the Dhaka megacity. Driven by the profit-maximizing agenda of the developers the ongoing process of residential densification is exacerbating the situation. Urban densification of Dhaka is faced with the challenge in keeping the residential areas sustainable and environmentally friendly. This study attempts to investigate the impact of the densification process on the spatial quality of the residential built environment of Dhaka through the lens of environmental sustainability. The explorative research was conducted through a questionnaire survey, informal interviews, and field survey across seven residential areas of Dhaka undergoing the densification process. The primary data collected from the survey were categorized under four selected environmental aspects. Data collected through the questionnaire survey was analyzed with SPSS and Microsoft Excel. In the second phase, a correlation test was run to investigate the relationship between environmental sustainability and density. The findings revealed that the residential areas under densification intervention are facing an acute shortage of adequate accessible open spaces and the built environment is deprived of solar access, acoustic and visual privacy. But despite these shortcomings the overall livability was reported to be satisfactory from the resident perspective, which indicates a lack of awareness of the inhabitants about the long term environmental and health implications from living under such conditions.