This study explores the transformative role of artificial intelligence (AI) in designing and managing sustainable urban environments. Through a comprehensive literature review, we examined topics such as AI, sustainable architecture, smart cities, urban planning, and energy efficiency, selecting articles that provide significant insights into AI's influence on the built environment. The research highlights how AI-driven innovations, including data-driven decision-making, energy optimization, and predictive maintenance, enhance urban infrastructures' efficacy, resilience, and sustainability. Case studies demonstrate AI's impact on energy-efficient building design, smart materials selection, and intelligent urban systems such as traffic management, water distribution, and waste management. AI-powered tools, such as generative design and predictive analytics, enable architects and urban planners to create adaptive, resource-efficient solutions that address global urbanization and climate challenges. However, challenges such as data interoperability, ethical concerns, and computational demands remain. Despite these limitations, AI is poised to set new benchmarks for sustainable urban development, promoting flexible, ecologically friendly ecosystems. AI holds immense potential to redefine urban design and management, fostering innovative, sustainable solutions to global urban challenges.