This policy note provides a summary of extensive analysis carried out on urban poverty in Indonesia today and a review of main urban poverty programs, with the objective of providing the basis for an urban poverty reduction strategy. A second policy note, 'Indonesia: evaluation of the urban Community-Driven Development, or CDD program, Program Nasional Pemberdayaan Masyarakat (PNPM)' summarizes a more detailed process evaluation that was carried out of this important program in parallel to the urban poverty analysis and program review. The PNPM-Urban evaluation covers issues related to internal efficiency, distills lessons learned, and identifies options for improving program effectiveness. The two pieces together provide context for the review of existing programs and strategic directions for addressing urban poverty, as well as more specific operational recom-mendations for enhancing impact of the PNPM-Urban Program. Section one includes this introduction and the analytical approach of the study, section two covers the analysis of poverty trends and characteristics, section three includes the review urban poverty programs and benefit incidence analysis, and section four discusses policy implications for urban poverty reduction.