As a crucial component of urban development and territorial space resources, the urban underground space plays an increasingly important role in the new development stage. This study analyzes the new demand and challenges in the new development stage and proposes development strategies of the urban underground space accordingly. Based on the characteristics and requirements of the new development stage, this study analyzes the strategic demand for urban underground space utilization from the perspectives of territorial space planning system, green and low-carbon resilience concepts, and urban renewal modes. Subsequently, it proposes a series of new challenges to be addressed for urban underground space development in the new development stage. These challenges include the deficiency in territorial resource investigation and assessment, ambiguity in underground bearing capacity, deficiency in exploiting the low-carbon and resilient potentials of the urban underground space, and imbalance in resource allocation and ambiguity in development mechanism of the infrastructure. Furthermore, eight priority tasks and corresponding development suggestions are proposed from the aspects of legal and administrative system development, smart management of resources, planning theories and methods, data-driven paradigm, deep space utilization, spatial reconfiguration of built space, integral development of new areas, and regulation of metro-led space. This study is expected to provide insights for the legislation, planning, construction, and management of the urban underground space.