Sustainability assessment is increasingly being viewed as an important tool to aid in the shift towards sustainable urban ecosystems. An urban ecosystem is a dynamic system and requires regular monitoring and assessment through a set of relevant indicators. An indicator is a parameter which provides information about the state of the environment by producing a quantitative value. Indicator-based sustainability assessment needs to be considered on all spatial scales to provide efficient information of urban ecosystem sustainability. The detailed data is necessary to assess environmental change in urban ecosystems at local scale and easily transfer this information to the national and global scales. This paper proposes a set of key micro-level urban ecosystem indicators for monitoring the sustainability of residential developments. The proposed indicator framework measures the sustainability performance of urban ecosystem in 3 main categories including: natural environment, built environment, and socio-economic environment which are made up of 9 sub-categories, consisting of 23 indicators. This paper also describes theoretical foundations for the selection of each indicator with reference to the literature.