This document provides an overview of the state-of-the-art literature on culture and urban revitalization. Part 2 places the creative sector in contemporary context with a discussion of three social dynamics: the “new urban reality”, the changing structure of the creative sector, and the emergence of transactional policy-making. Part 3 turns to the major dimensions of current literature on culture-based urban revitalization: the promise of the creative economy; culture’s role in building community capacity; and the negative consequences of culture-based development. Part 4 uses the critical synthesis afforded by the review of literature to propose a new model of a neighborhood-based creative economy. Part 5 concludes with a reflection on research gaps and implications for community development policy and practice. Here the authors postulate that U.S. cities have the potential to regenerate urban neighborhoods through culture-based strategies that combine wealth-creation and social justice—but only by digesting the lessons of past experience.