Measuring the success of sustainable urban development has been difficult in the past. However, as this has become more important in the past few years, this paper develops an innovative sustainable urban development capacity measurement model based on principal component analysis (PCA) and Grey TOPSIS methodology, which has a significantly more comprehensive measurement, and reduces processing time and calculation difficulty. First, PCA is used to extract the main components that affect a city’s sustainable development capacity. Then, the actual sustainable development capacity level is measured using Grey TOPSIS, from which the sustainable development capacity measurement value is then calculated. To prove the model’s effectiveness and operability, it is then applied to measure the sustainable development capacity in 13 cities in Jiangsu province, China.