The climate in most of Gulf Cooperation Council (GCC) countries is considered arid with limited water resources. Proper management of scarce water resources is therefore necessary for sustainable water supply while meeting the growing water demands. Considering the importance of the sustainable use of Al-Khoudh well-field, the main goal of this study is to assess the urbanization effect on groundwater pollution in the well-field area. The management of groundwater resources requires the estimation of aquifer properties and interaction between multilayers aquifers. To the best of our knowledge, groundwater interaction between heterogeneous layers has not been investigated using field measurements applied with a numerical modelling. A three-dimensional groundwater flow model of Wadi Samail Catchment was developed to simulate a complex multilayer aquifer. Also, the nitrate transport model was simulated to evaluate the urbanization effect. The aquifer was divided into four layers: upper gravel, clayey gravel, cemented gravel and Ophiolite. The steady-state flow model was calibrated using groundwater level data in July 2016. Both the automated parameter calibration technique, and manual trial and error method were applied for calibrating hydraulic conductivity, groundwater recharge, and vertical anisotropy of soil layers. The optimum set of parameters were obtained by simulating water levels in 14 observation wells with a minimum root mean square error (RMSE) of 0.8 m. The calibrated model was validated using measured data for October 2016 and RMSE was found to be 0.81m. Also, the calibrated model was then used to assess the sensitivity of the model to the changes in vertical anisotropy (Vani), hydraulic conductivity (k), and recharge. The results indicated that the water level was sensitive to the changes in recharge and hydraulic conductivity. The calibrated hydraulic conductivity and Vani from steady-state simulation were used in transient calibration. The specific yield was found to be 0.15, 0.08, 0.05 and 0.018 for upper gravel, clayey gravel, cemented gravel and Ophiolite, respectively. The transient model was simulated for 11 years from 2006 to 2016 using monthly time steps for the 132 stress periods. The calibration results show a good matching between the simulated and observed head. Groundwater levels in some of the lower catchment observation wells were affected by the discharge from private wells in household level. This effect is found to be significant when the private wells and PAW wells pump water from the same aquifer layer. The nitrate transport model was used to assess the effect of urbanization on water quality in Al-Khoudh well-field. Both field observations and calibrated model show that surface water collects in the Al-Khoudh reservoir is one of the contamination sources in addition to the septic tanks from residential areas and nitrogen fertilizer from agricultural lands. The simulation results show that the closer the contaminant source from the well the higher the nitrate concentration. Model simulations depict that there is a significant effect on groundwater levels and quality from unregistered pumping wells and urbanization happening closer to the well-field. This study, therefore, highlights the importance of maintaining an inventory of unaccounted pumping wells and also ensures proper sustainable management of AlKhoudh aquifer system by limiting urbanization effect in a well-controlled manner.