In several littoral countries, fast growth of urbanization along the coast line is the contribution of the blue economy paradigm. However, uncontrolled rise of urbanization has detrimental impact on the economy. From different perspectives, urbanization should be considered as a positive logical transition for a country along the development path. However, unplanned urbanization in different parts of the world have caused serious damage to the living habitat, land use pattern, spatial congestion due to migration from rural areas, spread of slums, heath risks arising from poor solid waste management and a variety of governance challenges. As a result, urbanization invites more negative connotations than positive ones in the contemporary literature for the developing and less developed countries. However, blue economy policies seem to have more positive propositions in favour of urbanization. In precise terms, promoting coastal urbanization by subscribing to the core principles of sustainable, low-carbon and eco-friendly processes and technologies would eliminate the established fears associated with the business-as-usual approach toward city planning. There is a need to switch from production-led urbanization to tourism-led urbanization in which a city would rather serve as a space for consumption and leisure than for production. In the blue economy framework, coastal cities can be viewed as a source of economic dynamism, agglomeration of blue activities, social empowerment of resource-dependent local communities and pollution-free built-in environment.