Climate variability and urban growth have influenced the hydrological patterns of environmental sustainability of the Amaravathi River Basin which is currently facing challenges related to climate change. The present study analyses the combined effects of rainfall trends and urbanization on the Amaravathi River Basin over 23 years. The integrated analysis includes both parametric and non-parametric assessments of rainfall data, followed by landuse changes, Normalized Difference Vegetation Index (NDVI), Land Surface Temperature (LST), and Urban Heat Island (UHI) effects over the basin. The study revealed the increased annual rainfall, especially after 2010, with Coimbatore recording the highest average yearly rainfall of 1603.08 mm in 2022. The basin covers the major industrial districts (Coimbatore, Karur, Erode, Dindigul) of Tamil Nadu, and identifies a 40% increase in built-up areas, causing a rise in LST from 2013 to 2023, by 2.3 °C. The study also found a shift in peak rainfall from the traditional monsoon months (June–September) extending to October and varied rainfall in Winter seasons. These findings underline the need for climate-resilient infrastructure and sustainable urban planning to address climate changes and urbanization’s impacts.