The pace of urbanization in Sri Lanka over the past five decades has neither been spectacular nor comparable to the rate of growth of the urban populations of other developing countries of South Asia. The paper explains the definition of urban population, growth of urban population, the components of urban growth, projections of urban population, urban-rural differences and characterestics and the implications of urbnization. The slow pace of urbanization in Sri Lanka is due to a number of reasons. One important factor is the absence of a sharp urban-rural dichotomy. During the past five decades, the rural sector has been the focus of interest and most government programs have beeen directed towards the uplifting of rural communities. The pattern of urbanization that took place in the more developed countries, where an increasing share of the labour force shifted from agriculture to industry and subsequently to the service sector, is unlikely to occur in the same manner in Sri Lanka. It is possible that there will be a faster growth of the service sector resulting in the development and growth of small and medium-size towns. The urban population in Sri Lanka is projected to increase from 5.55 million in 2010 to 7.31 in 2020 and to 9.1 in 2030. Thus the proportionate share of the urban population to the total population is expected to increase from 26.8 percent in 2010 to nearly 40.0 percent in 2030.