The study examines the relationship between revenue generation and urban development in local government authorities in Uganda, using Kisoro Municipality as a case study. Anchored in Fiscal Decentralization Theory and second-generation fiscal federalism, the study adopted a descriptive cross-sectional research design. Quantitative data were collected from 116 respondents comprising municipal officials, revenue officers, and registered business owners, while qualitative data were obtained through key informant interviews. Data were analyzed using descriptive statistics, Pearson correlation, and multiple regression analysis. The findings reveal statistically significant positive relationships between local revenue sources (r = .588, p < .001), revenue collection efficiency (r = .621, p < .001), and revenue utilization and accountability (r = .714, p < .001) with urban development. Revenue utilization and accountability emerged as the strongest predictor, explaining 51.0% of the variance in urban development outcomes. The study concludes that strengthening accountability and transparency in revenue utilization is more critical to urban development than merely expanding revenue sources. Policy recommendations emphasize institutional accountability, modernization of revenue systems, and diversification of municipal revenue bases.