The informal growth of urban settlements has become a phenomenon characteristic of developing countries where planning and law implementation are deficient and government agencies are unequipped to deal with rapid urbanization. Kabul is one of those fast growing cities which have experienced a major population growth in the last decades with many challenges including informal settlements, which have become an inevitable manifestation. A rapid increase in the urban population of Kabul and its related consequences have been difficult to handle and manage, furthermore the limited capacity of the government to meet the high demand for building plots has led to the growth of informal settlements. Today informal settlements represent about 69% of all residential areas in Kabul and the residents are suffering from many problems. The government’s main planning strategy has been upgrading in the form of paving the roads and provision of basic public facilities. This paper presents an upgrading model which was proposed by the Ministry of Urban Development and Housing (MUDH) for developing a part of the Kabul Old City. It basically focused on the analysis of the model from the socio-economic and environmental point of view and discusses the major pros and cons of their proposed development plan.