In the early 20th century, Iran entered a period of development in all areas, especially in the economy. The rapid establishment of factories led to significant changes in urban spaces and had many consequences. One of the industries that received attention and was a symbol of progress for the Pahlavi government (1921-1941) was the sugar industry, which broke free from Russia's monopoly through relentless efforts. Among them, the Abkooh Sugar Factory, as the largest industrial unit, was established in Mashhad and had a significant impact on its surrounding geography. The aim of this research is not to examine the economic history of the Abkooh Sugar Factory. This article, using documentary and library sources and historical research methods, seeks to highlight the role of this factory in the development in the first 20 years of its establishment in the city of Mashhad, and to assess the primary and secondary outcomes of founding this industrial unit. In the first step, the Abkooh Sugar Factory, by producing maximum sugar and its by-products, heavily restricted sugar imports into the country, ensured production growth and independence, facilitated road construction, and created urban security. On the other hand, in the long run, it exacerbated the issue of water scarcity in the Khorasan region, ultimately leading the mentioned industrial unit to further pollute the environment.