The extravagant celebration will be aired on the family's show, Keeping Up With The Kardashians.
Kylie has invited 100 guests and arranged for luxurious goodie bags that have been filled with products that companies have donated for free. The youngest of the Kardashian clan will reportedly pose in front of the table of goodie bags and post snaps of the party favours on her blog.
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The first of Kylie's birthday presents has already arrived, a matte-finished Mercedes-Benz G-Class SUV, and no doubt she will be showered with more incredible gifts on the day.
Kylie has chosen the skyscraper AT& T Centre in downtown Los Angeles as the venue.
Kim, who recently gave birth to her baby daughter North West in June, has kept a low-profile and is no doubt eager to get back into her social engagements.
It is speculated that Kim may be making her first public appearance before Kylie's sweet 16, so as not to steal her sibling's thunder.
"Believe it or not, it's not all about Kim," an insider told the New York Daily News. "She really wants to go to Kylie's party, and when it comes to the family, Kris wants everyone there. Kim is just working with Kris to figure out the best plan of action."
Fans of the Kardashian clan waited for weeks in anticipation of Kim's first post-baby appearance, which the reality star made last Friday on her mother's talk show, The Kris Jenner Show.
Kim made a brief appearance via a video link, looking picture perfect in a white shirt seven weeks after giving birth.
"Hi Mom, I just wanted to say congratulations on your new show," said Kim. "I am sorry I could not be there, but I am loving life at home right now."