This paper reflects on the idea of the environmentally sustainable neighborhood and situates it within the broader scientific and technical debate on how environmental concerns are reshaping contemporary urban planning. It links this discussion to the pressing and unresolved challenge of urban peripheries—an issue that has become increasingly urgent and can no longer be deferred when upgrading existing cities. In the context of growing sustainability demands, environmental performance is presented as a prerequisite for effective interventions in the compact city. The planning logic of these peripheral areas—dominant in scale within many Italian settlements developed during the post–World War II period—remains deeply influenced by the research and principles of the modern architectural and planning movements, which assigned the neighborhood a central role in urban form and organization. Building on this legacy, the paper outlines and discusses key characteristics that sustainable neighborhoods should embody to guide redevelopment strategies for existing urban fabrics as well as plans for reconstruction or new development from scratch.