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Compared to other developing countries in Asia and Africa, Brazil experienced an early urban transition. Cities, especially large ones, already concentrate most of the country's population and economic activity. However, an underlying structure of inequality persists in urban areas, reflecting a historical reluctance to accept urban growth or to steer markets and planned developments towards meeting the housing needs of the poor. This continues to hinder the day-to-day functioning of the cities and the expansion of their economies. Recent attempts to overcome this legacy with democratic and participatory processes have encountered difficulties, but have achieved some notable successes. Both past negative experiences and recent policy efforts in Brazil are useful in re-orienting urban growth in other countries that have just begun their urban transition.