Millions of people in cities of developing countries live in informal settlements (often called slums), lacking access to basic infrastructure and facing a permanent threat of eviction. An eviction results not only in the loss of a home, but separates people from their livelihood, community and essential socioeconomic networks. Rather than evict people, urban authorities should upgrade informal settlements, as it allows the residents to stay onsite and builds on investments they have already made in their houses and the settlement. Upgrading involves the improvement of infrastructure and enhancement of land tenure security which can motivate the residents to invest in the improvement of their homes. It also signals recognition of the settlement and its population by the authorities as integral parts of the city. Besides benefits (such as better health and greater self-confidence), upgrading has its risks (such as indebtedness and gentrification). It requires active participation by the people in planning and decision making to ensure that the project matches their conditions, needs and priorities. Participation can empower the community to negotiate with the authorities for other entitlements. Upgrading does not produce perfect settlements, but can be an important first step in a long journey of development.