Since the fall of the Soviet Union, many industrial cities and towns of post-Soviet Russia have witnessed large-scale transformation of the economy, society etc. connected with the collapse of a whole political system. In particular, the most part of remote cities, towns and rural regions have suffered from political and economic transition that brought fundamental change to these settlements, their people and environment. In this regard, a special category is presented by remote northern Russian settlements being mostly single-industry mining cities and towns. Development of such single-industry cities at the North of Russia is determined by specific economic and social conditions, as well as natural and climatic factors. The mono-profile character of single-industry cities' economies poses high development risks of the “boom-bust” type and the relevant social problems. So, what is the current situation in urban development regarding socio-economic aspects, e.g. what will start / has started after industry fall-down / transformation? What challenges of their development prospects these cities face today? How do local community participate in urban planning and development and how they try to cope with development challenges (civic engagement)? This paper endeavour to answer the questions, using town of Kirovsk (Murmansk region) for case study. Established as a single-industry town of phosphorous ores mining and processing in the Khibiny Mountains, Kirovsk reflects the situation being common for many industrial post-soviet cities and towns at the North of Russia, which past and present is connected with the resource-oriented economy. Moreover, like many other northern Russian post-soviet settlements, case of Kirovsk provide an example of the industrial peopling of the northern regions being almost uninhabited before. However, some differences occurred resulted from recent Soviet industrialization processes. The main factors (e.g. socio-economic, environmental and land use, institutional) were assessed to learn how they may contribute to sustainable development of Kirovsk as a single-industry town. The paper presents the potentials and challenges for further development of Kirovsk and study its chances to become a sustainable town. Most challenges are connected with structural and paradigm changes in economy and functionality of enterprises after collapse of the Soviet Union. Among them are also contradictions of interests (e.g. enterprise owner – regional government – local workers) as well as downsizing and depopulation, domestic and foreign market situation, environment pollution and degradation and associated health problems linked to quality of life of local population. However, Kirovsk has also opportunities to become a sustainable town that are based on tourism development potential and innovations development towards environment saving technologies conducted by scientific institutes located there. In addition, participatory approaches (e.g. public participation, involvement of stakeholders and activism of local NGOs) in urban management allow the linkages to be made among specific forms of land use, its management and policies.