In the last decades, prosperous regions in Europe have experienced a tremendous rate of urbanization. In spite of considerable research efforts in the last decades, the socio-psychological implications of urbanization are still poorly understood. This paper aims to systematically determine the influence of urbanization on the relationships between inhabitants and their residential environment including their place attachment, place-satisfaction, civic participation, and proximity behavior. To achieve these goals, standardized cross-sectional questionnaires were administered to random samples (N = 1200 each) of the residential population in four study areas in Switzerland, which represent rural, peri-urban, suburban, and urban stages of urbanization. Statistical analysis revealed that place attachment was mainly influenced by the inhabitants' good experiences in the place, their sense of local community, their local social contacts, and the level of urbanization. A structural equation model (SEM) further showed that the degree of urbanization of the setting had a direct negative influence on place attachment, while place attachment appeared to be a key moderator of, and a main driver for, place-satisfaction, civic participation, and proximity behavior. A key to reducing negative impacts of urbanization is therefore to offer optimal opportunities for access to appropriate public places.