Seismic microzonation and earthquake loss estimation scenarios are needed for city planning, disaster preparedness, risk reduction and hazard mitigation decisions, and urban rehabilitation actions in earthquake prone areas. Loss estimation due to earthquakes in an urban environment is a very complex process that requires detailed building inventories, realistic estimation of earthquake characteristics on the ground surface and comprehensive assessment of building vulnerabilities. The earthquake hazard is spatially distributed in relation to earthquake sources that need to be assessed based on the regional seismotectonic scale and local site conditions. Mapping the variation in earthquake hazard at an urban scale makes it possible to select relatively less affected zones for the allocation of appropriate land use. Urban development patterns can be oriented toward these relatively less affected zones to minimize possible earthquake damages. The three principal factors controlling earthquake loss are earthquake source characteristics, site response and structural features. The seismic microzonation maps would indicate the distribution of site response with respect to ground shaking intensity, liquefaction and landslide susceptibility; thus providing an input for urban planning and earthquake mitigation priorities at an urban scale. It is also possible to estimate building damage and causalities based on microzonation maps used as an input to earthquake damage scenarios. These estimates may be very approximate and may not always be on the conservative side based on the accuracy of the input data and methods of analyses. However, they can also be more realistic and more accurate when more comprehensive data and more sophisticated analysis methods are implemented. Thus one of the important issues is the estimation of the needed accuracy and corresponding level of complexity in the analytical studies. The results obtained using different levels of seismic hazard and site characterisation data will be summarised very briefly to demonstrate the importance of the comprehensive site characterisation as well as the procedures used to estimate site effects for different levels of seismic hazard based on case studies conducted in Istanbul.