In the 1980s about 85 of housing development in Indonesia is done by the community that is called kampung Struyk Hoffman and Katsura1990 in Zhu J 2010. Kampung in the city of Surabaya occupies 30 of built up area and holds more than 70 of the population of the city so the existance of the kampung is an
important part of urban development Silas1983. Public awareness on environmental development in Surabaya through creative innovations to make the kampung as a livable settlement for the peoples lives. This paper aims to elaborate the potential of the kampung toward a livable settlements with innovative approach. The analiyze will conduct by discriptive qualitatif through data documentation from various resources. Elaboration the condition of the kampung with the theory will be conducted to demonstrate the potential of the kampung to be innovative and livable settlements. Kampung has the potential to be developed as an innovative settlement although in the limited dimensions and level. Kampung level of innovations can be developed to be a tool for change in the city of Surabaya position globally. The city has a big challenge to develop innovative kampung in order to achieve a liveable city.