As cities are growing in terms of population and physical size, their contributions to national GDP are also increasing due to increased economic activities in urban areas. Now in many countries the contribution of cities to national GDP is 80 percent or more of the total GDP. With this greater role of the urban sector, the demand for urban transportation – passenger and freight has increased many folds in the recent years. With the growth or urban economies, the living conditions and lifestyles of the city people are also changing. As income of the upper and middle class people in the city is increasing, the ownership of private vehicles is increasing rapidly. In this paper, the issues in sustainable transportation, areas of actions their importance and the policy, infrastructure and other interventions required to achieve the objectives are discussed. In addition, a set of indicators are suggested to measure the progress of achieving the objectives.