From the perspective of segmented assimilation in the United States, a key question is whether the children of immigrant workers in European societies will experience socio-economic inclusion (“assimilation”) or exclusion (“segmentation”). This study focuses on the Turkish second generation in European cities as a critical case of ethnic segmentation. In particular, the analysis examines the role of urban contexts as moderators of “ethnic penalties” on socio-economic attainment. Using Census data, the authors find large net ethnic penalties for the Turkish second generation in the urban area of Brussels, where they make up the bottom end of the ethnic hierarchy. In comparison to the second generation living outside the urban area, however, they are more often in paid work, less rarely self-employed, and less totally excluded from high-end jobs. Our comparative findings run counter to common negative portrayals of post-industrial urban economies as a mobility trap for the children of immigrants. Instead, they suggest an upside to differential ethnic boundary dynamics in urban economic centers versus their national peripheries. To conclude, the authors discuss comparative implications for the fortunes of the second generation in European urban economies.