This study investigates the critical role of local leadership in sustainable development, focusing on leaders’ behavioral traits and their dynamic interactions with systemic factors. A mixed-methods approach was employed, combining System Dynamics Modeling with qualitative and quantitative data collection. Data were gathered through the stratified sampling of residents., focus groups with 35 participants across domains such as agriculture, education, and health, and public consultations in the Vytina Municipality Unit in Greece. Questionnaires addressed topics including sustainability principles, behaviors, cultural norms, and community goals, while focus group discussions explored sector-specific challenges and strategies. The analysis utilized thematic coding for qualitative data and sensitivity analysis for simulation outputs to evaluate leadership effectiveness. Findings highlight the significance of adaptability in dynamic environments, cultural sensitivity in overcoming resistance to change, and community engagement in fostering trust and participation. Simulation results revealed critical feedback loops, such as the reinforcement of trust through transparency and collaboration, which amplified sustainable development outcomes. This research underscores the potential of System Dynamics Modeling to integrate empirical insights and predict the long-term impacts of leadership behaviors. Key challenges include the model’s reliance on simplified assumptions and its context-specific applicability. Future research should further refine the model and expand its validation in diverse communities to enhance its robustness and utility.