In Saudi Arabia, an array of diverse strategies has been applied in response to the adverse effects of urban sprawl. A review of the historical proliferation of these strategies indicates that although in the short term the strategies have achieved high-quality infrastructure in some parts of the major cities, longer term prospects are less promising since numerous urban problems persist in these cities. Among these problems are uncontrolled developments in the fringes, inadequate urban services, spiraling land prices and construction costs, proliferation of slums and degrading quality of the urban environment. This article reviews the urbanization process in Jeddah and outlines in brief the historical evolution of urban planning and development of the city. The paper, using qualitative methodology, investigates and highlights the need to integrate physical planning with urban development management. Attention is paid to the role of the municipal authority and the extent of its legal and fiscal discretion, inter-agency coordination and community participation, all of which, the paper concludes are central to municipal management and optimization of the effect of public policies and urban planning. This paper is organized into four major sections. The first section provides a brief review of public policy instruments for urban growth management. The second section illustrates some issues and challenges that have been encountered during the rapidly growing urban population in Jeddah. Here, some light has been shed on the public policies adopted for growth management as well as on the characteristics and the nature of urban planning and management systems. The third section focuses on the recent administrative reform and the current strategies adopted by the government for improvement in urban development management. In the final section, the paper focuses on the implementation of current views on how local authority and other stakeholders could be organized in order to take effective action and bring about meaningful urban development in Jeddah