This study examines and explores the contribution of an energy-optimized urban planning approach to efficient resource use in the context of Dhaka city, Bangladesh. A conceptual energy optimization model called the “EnUp” model has been developed and tested for feasibility and adaptation strategies to improve urban energy use in residential settlements. This study is based on a system analysis and grounded theory approach that involved field methods including key informant (KI) interviews and collection of data and information from local urban planning offices and other secondary sources. Results show that the adoption of an energy-optimized planning approach is possible and necessary in Dhaka city. The “EnUp“ model can be applied in new urban settlement planning and retrofitting existing urban settlements. Ensuring various stakeholders' participation, technical inputs, and adaptability could make this innovative model and approach replicable in many other cities in the world. The study facilitates a better documentation and visualization for comprehensive urban planning and energy planning process in developing countries, while providing useful insights to policy makers, planners, developers, and interested urban stakeholders in the transition to urban sustainability.