The history of development of Kolkata as a megacity in India dates back to 300 years. The scenario changed when the administrative headquarter of the British East India Company was established in erstwhile Calcutta, located at the bank of the River Hugli in the lower Gangetic plain. Since its inception, Kolkata has undergone rapid formal and functional change. Both national and international migration has led to the demographic explosion, urban industrial development and an increase in economic opportunities which caused environmental degradation. Until 1793, the urban dynamics of Kolkata followed a linear pattern along the left bank of the Hugli River. A similar trend continued along the right bank from 1793 to 1947 and extended up to its periphery post-independence. In this paper, an attempt was made to explore the influence of river ghats on the urban environment along the selected stretch of the River Hugli. Human activities like garbage disposal (0.089), sewage disposal (0.088) and idol immersion (0.084) have a negative impact on the river water. Secondly, this paper attempts to study the vertical expansion of Kolkata. It has been observed that the average height of buildings in the CBD area is 84.6 meters while along the peri-urban area it is only 10.61 meters proving the distance decay effect (R2 = 0.405 and R2 = 0.314). Besides, the mean values of DQ (5.179mg/l), BQD (8.5mg/l) and CQD (34.5mg/l) in the river water reflect the degrading water quality for the aquatic environment. Geospatial assessment techniques were used to understand the research problems and combat the environmental challenges. Complex functional development and decaying urban quality of life along the Hugli River has led to critical environmental transformation.