Introduction. Cities play a key role in the development of countries and regions. The authors of the article emphasize the importance of the largest cities’ development, which is based on an industrial model that has not exhausted its potential. The authors show possibilities of urban development on the basis of the industrial sector effective functioning in order to improve the citizens’ welfare, meet their needs and improve the life quality. In this regard, the authors formulate a hypothesis that the largest Russian cities developing according to the industrial model have and are able to realize their potential in order to improve the life quality, preserve and increase the population on their territory. The authors set a goal: to identify the possibilities for developing industrial-type megalopolises to improve the population’s life quality of the (PLQ). Methods. The authors use the following information base: strategic documents of different levels, statistical data, scientific literature, analytical documents, and expert assessments of the megalopolises’ development. The authors also use an industrial model for developing the largest cities; they determine conditions under which the potential of megacities can be realized to improve the citizens’ life quality and carry out an analysis of the demographic and social situation in the largest Russian industrial cities. The authors evaluate some approaches and theses of the study as exemplified by the following cities with a million-plus population: Yekaterinburg, Krasnoyarsk, Chelyabinsk, and Omsk and they group the cities according to the signs of growth and decline, which is illustrated by favorable or unfavorable demographic trends. To confirm the identified trends and problems of the largest cities, the authors provide the results of expert assessments on the population’s life quality and the state of the urban environment and emphasize the need for a systemic integrated development of the largest cities of industrial type to improve the life quality of the population of megalopolises. The scientific novelty of the study consists in substantiating the prospects for the socio-economic development of the largest industrial cities of Russia on the basis of an industrial model that provides for the technological transformation of the economy, the use of agglomeration effects, the formation of a friendly urban environment for residents and the achievement of socialization of urban space. Results and conclusions. As a result of the analysis and typology of the largest cities by functional specialization, two groups of cities were identified: one group with signs of demographic growth, the second with signs of decline. The cities of the first group have a greater economic potential, opportunities for agglomeration, provide more comfortable living and consolidation of the population on their territory. On the contrary, cities with signs of decreasing have fewer opportunities (resources), are less diversified, the urban environment in them is less comfortable, which is reflected in the citizens’ life quality and is accompanied by the population’s outflow. At the same time, it was revealed that all analyzed cities actively use digital technologies, realizing, in particular, the concept of a «smart city». At the same time, cities with signs of decreasing show high IQ indicators of cities. Taking into account the identified problems, the authors propose promising directions for the development of industrial megalopolises with signs of decline.