Urbanization and growth of cities are the defining development trends in Uzbekistan, and the country has a unique opportunity to use them as drivers of development. To make the most of the urbanization opportunity, Uzbekistan needs to learn from global experiences, understand the challenges that growing cities face, and act quickly to create favorable conditions for urbanization. While reforms directly affecting urbanization are already underway in Uzbekistan, they can be more effective if they are based on a better understanding of the ongoing urbanization process and its challenges. Government of Uzbekistan initiatives such as the propiska reform, land privatization, and administrative reforms (among others) will have a direct impact on how cities develop, and whether they become drivers of social and economic progress. This report offers an overview of key characteristics of the urbanization process in Uzbekistan and issues associated with it, and thus sets a baseline for detailed work on advancing policy reforms related to urbanization and urban development. The second chapter of the report offers a review of the key outcomes of urbanization in Uzbekistan thus far and opens discussion about the two critical conditions that could be holding Uzbekistan back: factor market distortion and poor urban management. The third chapter presents more detailed analysis of key urbanization trends in Uzbekistan today and demonstrates the channels through which inefficient factor markets and deficient urban management limit the development benefits of urbanization. Chapter 4 digs deeper into these factors that might be causing the inefficient and unsustainable urbanization trends and attempts to identify policy-relevant conditions that might be driving these trends. Finally, chapter 5 discusses key directions for policy reform that are pivotal for effective and sustainable urbanization and urban growth in Uzbekistan.