Several sinkholes occurred in 1988 in an urbanized development in Kuwait. The properties of the deep sub-soil and bedrock was investigated through a detailed research program consisted of topographic, geological/geotechnical, and geophysical investigations. The study revealed that the geological profile is made of 35–40 m thick sandy overburden soil uncomfortably overlaying a Karst limestone bedrock. The cause of these sinkholes was attributed to the dissolution of the limestone bedrock and the subsequent raveling of the overburden soil cover. New sinkholes occurred in the summer of 2004 in the same area, indicating the need to assess the extent of the Karst Terrain in the area and its surroundings. The investigation documented that the same general geological profile also exists along the eastern coastline of the Arabian Peninsula, which had experienced several cases of sinkholes due to Karst cavities. This paper presents a comprehensive description of the desert karst terrain that exists in the eastern coastline of the Arabian Peninsula in general and in Kuwait in particular. The paper also presents an analysis of the causes of sinkholes that occurred in Kuwait. Discussion of the consequences of the sinkholes incidents on the regulation of the local government in setting guidelines for preliminary investigations for futuristic urban development in similar geological terrains in order to minimize the deleterious effects resulting from ground failure is also presented.