All land use development and particularly industrial development need site selection through environmental capability evaluation and environmental impact assessment to be sustainable. In order to This research analyses Environmental Impact Assessment of Automobile Industry which is going to be implemented in Takestan. Environmental impacts of this development have been assessed using both Rapid Matrix and Map Overlay methods. This process consists of: project description, identification of impact assessing discovering and predicting the impacts of project on environment, impact assessment, presenting the works that should be done in order to reduce negative impacts and present environmental management plan. Results of environmental capability evaluation through comparing with ecological model of industrial development by using Geographical Information System show about 85% of the selected site fits with category 1 and 15% of that fits with category 2, so the suggested place has the required capability for this land use type. In the next step, environmental impacts of establishing such factory were evaluated using Rapid Matrix method. According to the results of evaluation, performing mitigation plans are required. Spatial representation of results obtained through Rapid Matrix show that southern part of the studied area is the most affected. Therefore, mitigation measures and rehabilitation plans in this area has more priority with respect to other places.