ThE study examines the relationship between revenue generation and urban development in local government authorities in Uganda, with a focus on Kisoro Municipality. Grounded in Fiscal Decentralization Theory (Oates, 1972) and second-generation fiscal federalism (Rodden, 2006), the study adopted a descriptive cross-sectional design. Data were collected from 116 respondents using questionnaires and key informant interviews. Quantitative data were analyzed using descriptive statistics, Pearson correlation, and regression analysis, while qualitative data were thematically analyzed. 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. The study concludes that strengthening accountability mechanisms is critical for sustainable urban development in secondary municipalities.