Urbanization in Bangladesh is in terms of increasing regional inequality, centralization of development, mass poverty, high unemployment rate, social stratification, over crowding, housing problem, proliferation of slums and squatters and at large deterioration in the overall environmental conditions. The study attempts to identify the major urban environmental condition of Bandarban Municipality. Investigation was based on perceptual as well as factual data sources. The perceptual data was collected through field survey which was based on structural questionnaire. Total 140 selected samples were considered and simple random sampling techniques have been adopted during data collection. These factual data was collected from various secondary sources like books, journals, magazines, national and international published data etc. The present study revealed that, the socio-economic condition of the respondents is moderate. People are engaged in micro level local business and their educational qualification is primary and secondary level. Urban facilities like transport communication, health care, gas, sanitation, electricity and water supply, solid waste management condition are worsening than other districts in Bangladesh. Level of air, soil, and sound quality was satisfactory but surface water quality was alarming and availability of light inside the house in day time of the respondents’. Insufficient supply of urban facilities was the main hindrance of tourist spot as well as overall environmental development in Bandarban area. A satisfaction index was applied to determine the satisfaction level of urban environment of Bandarban Municipality. In order to, govt. proper planning’s and initiatives and NGOs collaboration help to build Bandarban as an environment friendly, recreational and resourceful district in Bangladesh.