The ability of cities to generate more and better employment has become a major concern in the wake of the recent global financial crisis and continued jobless growth.(1) This concern is made all the more urgent in the context of an increasingly urban global population(2) and historically significant mobilizations against the concentration of global wealth.(3) A central challenge for the New Urban Agenda is therefore to secure policy commitments that would enable greater economic inclusion. In turn, this will require a more just distribution of resources, including urban public space,(4) and a more sustainable and inclusive approach to employment and local economic development.(5) Civil society actors, including organizations of informal workers, are playing a central role in demanding such commitments. Women in Informal Employment: Globalizing and Organizing (WIEGO) is a global research–action–policy network founded in 1997 to improve the situation of the working poor, especially women, in the informal economy through stronger organizations and networks of informal workers, improved statistics and research, and more inclusive and equitable policies and practices. Since WIEGO’s founding, interest in – and research on – informal employment has grown considerably. WIEGO’s specific contribution has been to put statistics and research into the hands of informal workers and their organizations to bridge ground realities and mainstream policy debates; and to bring the voices of workers and their organizations to policy debates. This paper, which also serves as an introduction to this special issue of Environment and Urbanization on urban livelihoods, draws on the WIEGO network’s experience to review the current state of knowledge on the urban informal economy and to identify critical policy issues in relation to the New Urban Agenda, several of which are highlighted in this issue. In Section II, it presents the latest available statistics on the size, composition and contribution of the informal economy in various regions, demonstrating that informal employment is the norm in the global South. Sections III and IV then review theoretical approaches to informality in the economic development and urban studies literatures, identifying important gaps and promising new directions suggested by the articles in this issue. The paper concludes by presenting a framework to think afresh about urban livelihoods and appropriate policy responses to them.