Many of the significant urban transformations of the new century are taking place in the developing world. In particular, informality, once associated with poor squatter settlements, is now seen as a generalized mode of metropolitan urbanization. This article focuses on urban informality to highlight the challenges of dealing with the “unplannable” exceptions to the order of formal urbanization. It argues that planners must learn to work with this state of exception. Such policy epistemologies are useful not only for “Third World” cities but also more generally for urban planning concerned with distributive justice.