The present study explains the application of a numerical simulation to investigate the thermal environment of a new riverside residential development in summer. The case study area consists of more than one hundred two-story detached houses built next to a river near Tokyo, Japan. According to the meteorological data, prevailing wind directions are at an angle to the northbound river flow affecting the microclimate of the study area in terms of surface temperature of land and buildings, air temperature and wind distribution at pedestrian height. These factors have been estimated using the stepwise CFD (computational fluid dynamics) simulation of radiation, conduction and convection. This method leads to an improvement of outdoor thermal environment by manipulating the site design and layout planning scenarios. The effect of river, permeable pavements and green space on thermal environment is examined by the site design options. Likewise, the impact of building arrangement is evaluated using alternative layout planning scenarios. In total, five scenarios have been simulated for the proposed sustainable development as explained in the paper. Above simulations provided an insight into the mitigation effects of each countermeasure. It is also shown that the management of inflow paths and the creation of wind paths for the interior of the site have the potentials to improve the outdoor thermal environment of riverside residential development.