Urbanization in Tanzanian cities has led to significant growth and transformation of settlement patterns, with informal settlements emerging as a prominent feature. The research employs qualitative methods, including interviews with residents and policymakers, to examine the lived experiences and policy interventions related to urbanization and informal settlements. Informal settlement dwellers in Tanzanian cities face challenges such as inadequate water supply (40% of households report limited access) and poor waste management services (35% indicate unsatisfactory conditions). Urbanization has both positive and negative impacts on social welfare, with significant disparities observed between formal and informal settlement residents. Policymakers should prioritise the provision of basic infrastructure in informal settlements and implement targeted programmes to improve access to healthcare and education for these communities.