Urban development for growing, modern cities may have adverse effects upon the inforal sector. This article is based on three case studies from Bangladesh, India and Ethiopia. The first two illustrate the challenges faced by informal sector workers resulting from developments in the transport sector in Bangladesh, and in the energy sector in Ethiopia. In both cases, the informal sector entrepreneurs are characterized by low incomes, vulnerability and high competition for limited markets, and the research suggests that their vulnerability was increased by urban development. The third case study is intended to show how the needs of informal sector workers can be accounted for in development processes. In it, waste-recycling entrepreneurs are employed by an organized waste collection service. The author considers what could have been done to avoid some of the adverse impacts, and asks what is now needed to address the hardship and vulnerability faced by displaced service providers. Recommendations are made for future projects aimed at practitioners and policy-makers.