The paper aims at developing and applying criteria to assess sustainable dvelopment in Vietnam's traditional villages. The proposed critteria system cover all three aspects of sustainable development: economic, social and environment. Based on a survey of production entities (households or enterprises) in 5 traditional villages in the North of Vietnam, the paper has applied its proposed criteria. The application reveals the lack of vertical and horizontal economic linkages, social problems and ignores evironmental awareness in these traditional villages. However, the application proves that our criteria can overcome dificulties in data to assess sustainable development in these villages.