Abstract Informal sector as the economic dimension of poverty characterize numerous metropolises of the developing countries. Informal urbanization is growing as much as formal urbanization and if the existing circumstances keep going, it will be a serious menace to urban Economics. Given a few decades attempts of the urban management, informal sector still remain as one of the basic difficulties of urban management in Iran. In the recent experiences of the urban planning system in Iran, there is no comprehensive urban development, and Informal sector has been ignoring in urban planning.Recent assessments show that main part of city’s population in Iranian cities is working in informal sector. This growth usually originates from two components of natural population growth and migrations. Most of Urban poor are occupying in informal sector too, therefore any plans for upgrading and poverty reduction must be include it. This article approves the dual nature of Informal sector, and emphasizes significant it in urban economics of Iranian large cities. Undoubtedly, Development of the city need to change the conventional management and policy making approaches, as well as, need to inclusive collaboration of all city stakeholders such as informal sector employers.
