Analyses of the extent of urban poverty have focused on the definition of Poverty Lines and quantification of the proportion of people below them. Such analyses are necessary but, although some of the methodological problems can be overcome, they pose problems arising from both their over-simplified conceptualisation of poverty and their limited contribution to explaining its continuation, reduction or deepening. Recent work on rural poverty, which distinguishes between underlying causes and immediate triggers in explaining the process of impoverishment, is found to be relevant to urban areas. This more sophisticated understanding of poverty and deprivation, as a set of relationships and a process rather than a ‘state’, implies that the poor are not passive. Attempts to analyse their responses have typically been based on the concept of ‘household strategies’. Although care must be taken with definitions, such analyses are revealing. The implications of improved understanding of the changing extent and nature of urban poverty are that a number of policy approaches are needed: safety nets for the most vulnerable; opportunities for households to increase their assets; assistance to enable people to take advantage of income earning opportunities; provision of basic utilities and services; and the creation of a policy framework, as well as legal and physical context which is favourable to the activities of the urban poor.