Most Australians live in urban environments. In fact, Australia is one of the most urbanised countries in the world with more than 96% of the Australian population (approximately 24.5 million people) living in urban areas, 68% of whom live within Australia’s 8 capital cities. The structure, form and function of Australia’s urban environments significantly influence our cultural connection, enjoyment, and access to goods, services and opportunities. How we live in our urban environment in turn affects the state of our natural environment including the extent of our biodiversity, the sustainability and quality of our natural resources, and the scale of waste and pollution generated. In this way our urban and natural environments form an important and intricate ecosystem that drives not only the livability of our environment but also the wellbeing of most Australians. This chapter focuses on the interrelationship between the urban and natural environments, and the subsequent implications for the health and wellbeing of both humans and nature. This chapter focuses on the environmental implications of the built environment – as distinct from a broader range of social and economic urban management issues such as housing affordability, job generation and economies – and how they affect humans and nature. Throughout this chapter and the state of the environment report, Aboriginal and Torres Strait Islander people are referred to as ‘Indigenous’, as per terminology agreed by the greater Indigenous authors group to ensure uniformity and inclusion. Where titles or direct quotes have been used, this terminology may differ, and it is important to note there is no one, universally agreed way to represent groups – the Indigenous people of Australia are incredibly diverse across language, cultures and a multitude of other factors. The name of the chapter has been changed from ‘Built’ in the 2016 SOE report to ‘Urban‘ in 2021 to reflect a more contemporary systems-based approach to this discipline. The urban environment is a broad term used to describe the human-made surroundings where people live, work and entertain themselves. The urban environment includes both the physical (built) structures where people undertake these activities and the supporting infrastructures, such transport, water and energy networks. Therefore, the revised term moves the focus in urban planning away from the design, character and form of the physical and built structures of an environment and to the collective context of a city, town or village, including the natural areas between and surrounding buildings. This chapter focuses on the implications of the urban environment for the natural environment and not the social and economic aspects of the urban environment. Notwithstanding this, it is recognised that distinctions between environmental, social and economic issues and how they relate to the urban environment can at times become blurred. Where relevant, we have sought to compare findings to the 2016 and 2011 SOE reports. However, in many cases, the data used in 2016 have not been subsequently updated. In these cases, the extensive data that relate to the urban environment have been used from many sources including all levels of government, academics, not for profits and peak industry groups. Data have been heavily drawn from organisations such as the Clean Air and Urban Landscapes Hub of the National Environmental Science Program, the Australian Bureau of Statistics, the Australian Renewable Energy Agency, the Australian Sustainable Built Environment Council, the Australian Urban Research Infrastructure Network, the Bureau of Infrastructure and Transport Research Economics, and CSIRO. The report has also incorporated academic peer-reviewed publications that are relevant to the chapter. The challenge has been consistency of data across multiple jurisdictions and the significant number and diversity of urban areas. As this is the first time an Indigenous perspective has been included in the authorship of the SOE report, it has been important to note Indigenous ways of storing and transmitting knowledge. To this end, the use of narrative and storytelling has been used as both a method of articulation as well as a source of data, information and knowledge. To assess the state of the environment, its pressures and how they are being managed across Australia, 2 methods were used: a survey sent to the 537 councils across Australia a semi-structured interview with the departments of planning for each state and territory, and the Australian Government. These inputs have allowed for data verification and provided critical inputs to the assessment process. The assessments of outcomes in the Urban chapter have sought to align with the assessment approach taken in 2011 and 2016 to allow for continuity and tracking of outcomes. The assessments were informed by an expert roundtable comprising one representative from each state and territory government. Representatives from the peak industry groups of the Australian Institute of Architects, the Planning Institute of Australia and the Property Council of Australia were also involved.