Abstract: Most CA urban models assume densities to be uniform for all cells. This is not true in real cities because densities substantially vary from cities to cities and from urban centres to periphery areas. Development density which affects urban form is an important factor in urban planning. This paper presents a CA model that incorporates density gradient for the simulation of urban development of different urban forms. Development density is obtained from density decay functions and assigned to the cells when they are converted into developed ones according to CA transition rules. The model which is based on the concept of "grey cells" can be used as a planning model to explore various combinations of urban forms and development densities. This paper also evaluates and compares the development patterns generated by different density gradients. It is found that development scenarios with high-density development can significantly reduce the encroachment on agricultural land and other important environmentally sensitive areas.