The rapid development of Smart Product Service Systems (Smart PSS) reflects a broader trend toward sustainable business transformation. Fueled by continuous advancements in digital technologies, Smart PSS creates opportunities for enhanced efficiency, customer-centric innovation, and circular resource utilization. Yet, alongside these opportunities arise significant challenges, including system complexity, data interoperability, and the need to balance economic performance with environmental and social sustainability. To fully harness the potential of Smart PSS, it is essential to adopt holistic frameworks that integrate products, services, and digital capabilities into a unified architecture. Moreover, sustainable Smart PSS development requires deeper supplier integration to ensure resilience across the entire value chain, as well as active multi-stakeholder collaboration among manufacturers, service providers, policymakers, and end-users. In this chapter, we examine the dynamic correlations between Smart PSS and sustainability, demonstrating how Smart PSS can function as both an enabler and a driver of sustainable development. Finally, we identify key research directions that highlight pressing needs for theory and practice, laying the foundation for advancing sustainable Smart PSS design, implementation, and governance.