It is now common for managers, strategists, planners and citizens at municipality level to use sustainable development indicators (SDI) to help them work towards sustainable development. SDI constitute an information system for monitoring, reporting and decision-making which in theory should help us decide how to intervene in natural, economic, social and political systems for a better, more sustainable future. But not all indicator systems are created equal. Some are better tools than others when it comes to helping cities and municipalities in their work, and thousands of municipalities use SDI worldwide. How then should we assess the effectiveness of existing indicators for municipalities? To answer this question I develop an approach for assessing the edesign, creation and communication of existing, in-use SDI, and then apply it in a case study in Falun Municipality in Dalarna County, Sweden. The approach assesses five aspects of SDI: ‘Vision’, ‘Framework’, ‘Indicator Selection’, ‘Stakeholder Participation’ and ‘Communication’. The findings in Falun suggest that SDI have been essential to the implementation of sustainable development in policy and action in general municipal operations, but the municipality has not moved beyond a ‘conventional’ sustainable development vision and monitoring strategy. The benefits and constraints of the current indicator system are then discussed using the above approach, and the thesis finishes by offering suggestions for the municipality going forward. I also point to the need to develop a standardised assessment method for thousands of municipalities using indicator systems used today, to help in ongoing review and improvement of SDI in practice.