Cities are complex socio-economic-natural ecosystems that have the highest concentration of people and their activities. Implementation of sustainable development is the necessary approach to urbanization. Sustainable urban development can be monitored using an indicator system that accounts for both the socio-economic development and environmental protection. We used 277 cities at prefecture level or above and a municipality directly under the central government in China as case studies to develop an indicator system for sustainable development of different scale cities that comprised 24 indicators in three themes:economic development, social progress, and eco-environmental protection. The capacity for sustainable development of the 277 cities from 2000 to 2010 was evaluated using the full permutation polygon synthetic indicator method. The comparison among different scale cities showed that the larger the city scale, the higher the levels of economic development and social progress and the better the comprehensive capacity for sustainable development, but the worse the level of eco-environmental protection. Concurrently, the overall level of the eco-environmental protection was the worst of the three categories for all city scales. The cities clearly did not observe the same degree of resource conservation and environmental protection as they did for economic development and social progress. This was a common problem that different scale cities faced during the urbanization in the past 10 years. Furthermore, the comparison within different scale cities from 2000 to 2010 revealed that the indicator values for economic development, social progress, and eco-environmental protection of different scale cities increased significantly in the same period. Similarly, the comprehensive capacity for sustainable development of different scale cities also increased. Additionally, during the 10-year period, the megalopolises had the greatest increase in eco-environmental protection, whereas the large cities had the greatest increase in social progress. The small or medium-sized cities experienced the greatest increase in economic development and comprehensive sustainability capacity. These results indicated that the increase in city scale decreases the potential to improve comprehensive capacity for sustainable development. Therefore, China should focus more on promoting the development of small and medium-sized cities. However, by 2010, the indicator values for comprehensive capacity for sustainable development of megalopolises, large cities, and small and medium-sized cities were 0.40, 0.29, and 0.25, respectively (where a value of 1 represents complete sustainable development). The sustainability level was only moderate. This illustrated that different scale cities in China are facing many problems in the process of sustainable development and implementation of certain measures is required to guide future urbanization in China. In terms of economic development, it is necessary for cities to adjust the economic and industrial structure, raise the proportion of tertiary industry, promote the development of green and low-carbon industries, and build a more sustainable economy. In terms of social progress, government should improve the social management system and guarantee the rationality and fairness of education and healthcare resource allocation. As for environmental protection, we should promote the upgrade of environmental technology, reduce the energy consumption, and increase the investment in environmental pollution control. Attaining sustainable development requires simultaneous balanced development in economic, social, and environmental areas. Under such scenario, we can establish a new urbanization model that will lead us toward sustainable development.