The goal of this chapter is to address how urban dynamics at the neighborhood level are linked to children’s development. We first review trends in the spatial concentration of poverty and inequality in the United States in recent decades. Then, we turn to theoretical models describing how local communities, with a focus on urban settings, influence children’s development. We then cover methodological issues and focus on one critical issue, selection bias, and then briefly review study designs as related to this challenge. Finally, we provide an overview of empirical studies linking neighborhood, socioeconomic conditions, and children’s development, notably their educational, behavioral, and socioemotional outcomes.