In the light of sustainable development requirements, environmental psychology has an increasing role to play in addressing people–environment congruity. People–environment congruity refers to the interrelation between the individual and his or her (especially: residential) environment, considering the match between individual life satisfaction and objective standards of living. Promoting human well-being requires looking beyond singular effects of environmental features and considering people's overall relationship to their environment. This leads us to look at the residential environment as the place where people–environment congruity is crucial, and to propose a framework of analyses of the conditions of congruity between objective and subjective assessment of environmental stressors in relation to the individual and social expression of well-being. The paper concludes with the implications of people–environment congruity for research and policy-making about sustainable development.