The expansion of urban areas has become spatial feature in the urbanization process of cities in Indonesia. As the most densely populated island in the world, Java has experienced such formation in both large and smaller cities. In most cases of expanded urban formations of small cities in Java, the formation has also created growing towns or urban settlements in the peripheries. Using the cases of the expanded urbanization process occurring in Tegal City and Pekalongan City, two smaller cities of Java whose urban areas have expanded into the territory of surrounding regency (regencies or non-urban districts), this paper aims to elaborate on an understanding of the extent of which the growth of urban settlements in peripheries in the expansion process of small cities. The research, which uses the territory of subdistricts to delineate the towns, tries to find how the spatial process affects the formation of urban regions as well as the towns in the peripheries. The analysis on villages’ transformation in peripheries was implemented by showing the spatial evolution of population density in the regions. Next, the development of towns in peripheries was analyzed to show the influence of such an urbanization process on the formation of towns in the peripheries of small or medium cities in Java. Time series and comparison analysis are employed to develop an understanding of how urbanization affects spatial formation in peripheries. The results show that the urbanization process of small cities needs to be managed in integrated manner so then the urbanization and peri-urbanization processes can be directed to produce better formation of the urban region.