Developing countries, including Ethiopia, have implemented adaptive and proactivernapproaches to deal with the situation in urban slums. The efforts so far carried out inrnEthiopia, Addis Ababa in particular to this end includes: upgrading, urban renewal, andrneco-city planning among others. The primary focus of these efforts was only onrnundertaking physical improvements with minor concerns on the socio- economic andrnenvironmental dimensions of sustainable development.rnThis paper, therefore, examines the challenges of sustainable development andrnidentifies the views of the people on their future transformation of â€˜Korea-seferâ€™,rnpurposively selected slum settlement in Addis Ababa situated on steep slope and alongrnriver bank. The paper also forwarded recommendations and design proposals to curbrnsustainability problems in the study arearnHence, sample size representative of 10% is taken where systematic random samplingrnmethod is applied to select households located on three different geographic stratas:rnriver flood zones, slopes greater and less than 15%. The method for randomising isrnsnowballing to select one household from the list of the first 10 household numbers andrnthe rest are systematically selected. The paper further applied structured questionnaires,rninterviews and field observation to collect primary and secondary data. The datarncollected were analysed and presented with the help of different softwares, graphs, andrntables. Maps were also used to describe the events in the site.rnBased on the findings of the paper it is concluded that lack of appropriate training, thernnarrow access roads, overcrowded houses, deteriorated drainage lines, the unintervenedrnsteep slopes have aggravated the un-sustainability of the site in economicrnand physical aspects. Furthermore, the social and environmental un-sustainability isrnrelated to absence of open spaces, amenities. It is further aggravated by the presence ofrnwastes on the streets, drainage lines, and river banks coupled with the poor condition ofrnthe toilets. In addition to these flooding and dependency on non renewable energyrnsources have contributed a lot on the un-sustainability of the site.rnTherefore, the design proposals together with the recommendations forwarded addressrnthese issues to transform the slum settlement to a more liveable neighbourhood.rnKeyword: - transform, slum settlement, environmentally sensitive areas, sustainablerndevelopment