Urban poverty, ill health, and living in slums are intrinsically interwoven. Poverty is multidimensional and there is no agreement on a universal definition. UN-HABITAT has introduced an operational definition of slums that is restricted to legal aspects and excludes the more difficult social dimensions. The World Health Organization definition is more comprehensive and uses a health and social determinants approach that is strongly based on the social conditions in which people live and work. Health and improving the lives of people living in slums is at the top of international development agenda. Proactive strategies to contain new urban populations and slum upgrading are the two key approaches. Regarding the latter, participatory upgrading that most often involves the provision of basic infrastructure is currently the most acceptable intervention in developing countries. In urbanization of poverty, participatory slum upgrading is a necessary but not sufficient condition to reduce poverty and improve the lives of slum dwellers. Empowering interventions that target capacity development and skill transfer of both individuals and community groups—as well as meaningful negotiations with institutions, such as municipal governments, which can affect slum dwellers' lives—appear to be the most promising strategies to improve the slum dwellers' asset bases and health. Non-governmental organizations, training institutions, and international development partners are best placed to facilitate horizontal relationships between individuals, community groups, and vertical relationships with more powerful institutions that affect the slum dwellers' lives. The main challenge appears to be lack of commitment from the key stakeholders to upgrade interventions citywide.