Under the influence of the inevitable processes of modernization, post-industrial society, technology, globalization and parallel to them urbanization there happened necessary change. The relocation of life, activity, residents from villages to cities has led to a complete change of lifestyle, organization and functioning of the state at national and global levels. Urbanization has its advantages and disadvantages. Urban development has brought better connectivity, accessibility and diversity, and higher quality of various health and social services, better job offers, development of service activities such as catering, shops. Challenges occur at all levels of state functioning: ecology and environment, infrastructure, architectural layout and landscape design, capacity of institutions, traffic and connectivity, rising social inequality, rural development lags. The aim of the paper is to gain a deeper insight into the approach that has offered solutions to the emerging challenges that urban areas are coping with- an integrated approach that focuses on their area of work. In order to effectively implement the IUR in cities, the EU is offering to hers member states different measures and instruments within regional development and cohesion policy. That includes a variety of strategies, financial and non-financial instruments for assistance and support mechanisms such as funds, programs, associations, forums, conferences. Considering the potential and benefits of IUR and EU in its implementation, it is necessary to understand and exploit all possibilities for their national development and progress. Croatia has also been involved in the implementation of IAUs and progress has been made in growing number of applied and approved projects from EU funds in the IAU area. A growing number of cities and entrepreneurs from different parts of Croatia and industries have recognized the opportunities offered by the EU and the IUR. As part of this, operational programs were developed, smart cities discovered among them is Rijeka of its modernization and digitization ana associations such as CUTER. An example of the city showen in the paper is the city of Labin, which implemented different projects in the area of revitalization and restoration of cultural and natural heritage, improving the quality of life through the restoration of institution that provides sport and social activities, the development of cultural and natural tourism that uses existing resources so Labin can build its identity, increase jobs, increase investment, increase GDP and at the same time promote integrated and sustainable urban development. In order to gain a deeper insight into the implementation of the IUR in Labin author had an interview with City representatives in the field of European foundations and projects which proved that Labin is successfully implementing the IUR through: exploiting his potential in field of mining and tourism, revitalizing urban areas- building new ones and redeveloping existing institutions and locations that are needed, offers benefits to foster entrepreneurship and education, develop collaboration and partnerships, and implement CLLD access as well.