Effect of land use development in a coastal region on heat island phenomenon is studied numerically by an urban climate model that employs the k-ε turbulence model and an eddy diffusivity model for the transport of momentum, temperature and moisture in the Eckman layer together with a heat balance model for the surface boundary layer and the soil layer. Numerical simulations are carried out for a simplified terrain which consists of sea and land. Changes in wind velocity, temperature and heat fluxes are discussed for three types of land use, that is, land surfaces are 1) covered by grass, 2) urbanized as residential area and 3) further developed in a coastal region as business center. It is clarified in the urbanized area that decrease of latent heat flux and increase of sensible heat flux at urban surface raise temperature in the daytime. Urban canopy intensifies sensible heat transfer, leading to higher air temperature. Sea breeze is blocked by the increased roughness in urbanized zone, resulting in the reduced cooling effect of sea breeze.