Urbanization is a challenging issue for developing countries, like Malaysia. Penang Island is one of the states of Malaysia selected as a study area where limited flat land exists. As a result, this would create urban environmental problems, such as unstable slopes and landslides due to uneven topography. The purpose of this study was to develop land suitability model for hillside development. Hence, this research aims land suitability analysis modelling for hillside development by using integrated GIS (Geographic Information System) based MCDM (Multi-Criteria Decision Making approach. The hill land portion of Penang Island was selected for hillside site development using GIS and AHP (Analytic Hierarchy Process) as a MCDM method for sustainable hillside development. This study found that 15% of land was highly suitable, 27% moderately suitable, 41% less suitable, and 17% not suitable. Therefore, this research can be consistently used by the concerned authorities for sustainable hillside urban planning and development. This approach can be used as a policy tool in decision making of urban planning and development.