This paper is about the current and potential role of community-driven initiatives to significantly improve the lives of hundreds of millions of slum dwellers and squatters at local, city and national levels. It focuses mainly on the work of the urban poor/slum/homeless federations that have developed their own programmes, drawing on their own resources and capacities and negotiating with national governments and international agencies for support – and also for changes in policies or practices that harm or marginalize them. These are demonstrating approaches to slum and squatter upgrading, new house development and expanding provision for water, sanitation and other services that are usually far more cost-effective than the official initiatives developed by governments and international agencies. They are also more inclusive of the poorest groups and usually more sustainable. Where local and national governments support them, these also show a capacity to scale-up and include all urban-poor groups within a city.