More than half of the global population now live in urban settings. Urbanization can and should be beneficial for health. In general, nations with high life expectancies and low infant mortality rates are those where city governments address the key social determinants of health. Better housing and living conditions, access to safe water and good sanitation, efficient waste management systems, safer working environments and neighbourhoods, food security and access to services such as education, health, welfare, public transportation and child care are examples of social determinants of health that can be addressed through good urban governance. Failure of governance in today's cities has resulted in the growth of informal settlements and slums that constitute unhealthy living and working environments for one billion people. A credible health agenda is one that benefits all people in cities, especially the urban poor who live in informal settlements. International agreements calling for urgent action to reduce poverty, such as the Millennium Development Goals, can only be met through national strategies that include both urban and rural commitments and involve local governments and the poor themselves. Health inequalities in urban areas need to be addressed in countries at all income levels. Urban development and town planning are key to creating supportive social and physical environments for health and health equity. Achieving healthy urbanization in all countries is a shared global responsibility. Eliminating deprived urban living conditions will require resources — aid, loans, private investments — from more affluent countries in the order of US$ 200 billion per year, no more than 20 per cent of the annual increase in GDP in high-income countries. Creating global political support for a sustained and well-funded effort for social, economic and health equity is one of the greatest challenges of this generation.