Shushtar is ancient city in Khuzestan Province at south west of Iran and is considered as a world heritage. In the early 70’s, Shushtar New Town was decided to be constructed in order to answer the residential needs on new employers of Karun Agro-Industries Corporation. The project was located across the river from the old city and Kamran Diba, an Iranian well-known architect, designed this New Town for 30,000 residents. Shushtar New Town was designed in relevant with the cultural values of Iranian civilization to maintain the continuity with its regional historical background. Architect’s high attention on the traditional, cultural, social and historical aspect of the project helped it to be introduced as the distinguish design of 20^th century. Yet, how was ethical sustainability emanated in the master plan of Shushtar New Town? This research aims to examine sustainability in the design priorities and current condition of Shushtar New Town, on the basis of ethical sustainability as the most integrated and comprehensive current approach of sustainable development. To reach the aim of the research, history of new towns in Iran and Shushtar New Town are described, indicators of ethical sustainability are reviewed through relevant literature in the next step and then, the design priorities and current condition of Shushtar New Town are examined on the basis of ethical sustainability. In conclusion, suggestions are presented to re-emanate ethical sustainability in Shushtar New Town, and new developments are recommended in relate with design’s main and mostly neglected objectives.