Recent advances in immersive technologies, particularly the Metaverse, have introduced new opportunities for enhancing urban governance, citizen engagement, and smart service delivery. While global cities are gradually integrating multi-layered digital environments into their planning systems, Iranian cities are still in the early stages of conceptualizing and operationalizing Metaverse-oriented urban models. This study aims to identify and explain the factors influencing the formation of Metaverse value-added capabilities in the city of Ilam and to develop a scientifically grounded framework for the city’s gradual transition toward Metaverse-based urban environments. The research employs a mixed methodological design, combining qualitative thematic analysis with quantitative modeling using the PLS-SEM approach. In the quantitative phase, 250 valid questionnaires were analyzed, and the final model—consisting of five independent constructs including infrastructural readiness, digital governance, socio-cultural capacity, innovative economic development, and institutional-organizational capability—was evaluated. The results indicate that all structural paths are statistically significant at p < 0.001, with standardized coefficients ranging from 0.28 to 0.38. The R² value of 0.62 demonstrates a strong explanatory power, while the Q² value of 0.41 confirms the model’s high predictive capability. These findings suggest that creating Metaverse value-added functions is a multidimensional process requiring the simultaneous synergy of technical, managerial, social, economic, and institutional factors. Accordingly, policy interventions for enabling Metaverse development in Ilam should prioritize strengthening digital infrastructure, enhancing organizational capacity, fostering innovative economic ecosystems, and building public trust toward emerging technologies.