This paper provides critical reflections on the urban transformation campaign launched by the Istanbul Metropolitan Municipality (IMM) as part and parcel of its ambitions to upgrade Istanbul to "world city" status. I focus on two main aspects of "urban transformation" in Istanbul: prestige mega-projects and (re)development of informal housing areas, with particular emphasis on the latter. I examine how poor residents' livelihoods are put at stake in spite of the IMM's claim that "urban transformation" is ultimately beneficial for all citizens. I conclude with the unique policy challenges that the local governments face in developing participatory models for urban renewal and regeneration in Istanbul.