Emerging environmental planning issues in medium size towns in Kenya have received little attention. Therefore this study examined the status of Ahero town?s environment, identified its planning and environmental challenges, examined existing environmental management policy framework and developed a physical development plan. Questionnaires, key informant interviews, and observation methods were used to obtain data, that were analyzed thematically and through statistical computer package for social scientists (SPSS). The study established the existence of poor housing provision, inadequate liquid solid waste management, sanitation, and lack of a comprehensive physical development plan. It is recommended that the proposed physical development plan be adopted and strict development control within the planned area be instituted.The council need to enhance enforcement of the existing environmental policies.There is need to privatize liquid and solid waste management, expand water supply network and seek alternative sources of water to satiate the demand.