The town of Sariyer, is located at the intersection of Black Sea and Bosporus on the European side of Istanbul. It comprises most of the Istanbul's unfragmented forests and ecologically, economically and socially significant coastal line. On the other hand, Sariyer struggles with the challenges of urbanization: Increasing population and squatter settlements, urban expansion on natural areas, spatially and structurally changing coastal zone, proposed third bridge crossing Bosporus, and pollution are just few to mention. Sustainable urban and coastal zone development and environmental management is essential for Saiiyer's future, hence contributing to the livability of Istanbul at larger scale. Successful resource management on any scale requires a system of legitimate institutions. Thus, the institutional environment is critical in promoting sustainable land use pattern, as this environment is a major determinant of long-term growth. This environment consists of formal rules such as property rights, laws, constitutions, international treaties and informal constraints such as norms of behavior, conventions, and self-imposed codes of conduct, and characteristics of their enforcement. In this framework, organizations, which include political, economic, social, and educational bodies, are also important. This study inquires about the specific implications of the institutional environment for rapidly urbanizing town of Sariyer. It highlights the typical characteristics of the institutional environment with respect to environmental and coastal zone management in Turkey. The impacts of the inefficient institutional structure on the transformation of the landscapes are illustrated through landscape and site scale examples by using GIS and landscape ecology approaches. The outcomes of the study can help improving sustainable planning practices, hence, in turn, promote sustainable coastal zone development in Sariyer and other coastal towns with similar concerns.