By 2050, 70% of the worlds population-more than 5.5 billion people-will live in urban areas.This population boom, combined with threats of global warming, high energy prices and tight government budgets make a convincing argument for better planning.Using the examples of Melbourne, Paris,Portland, Toyama and Vancouver, this paper says that, with the right policies, compact cities can protect the environment, foster regional economic growth and offer a better quality of life.The core value of a compact city is its capacity to integrate urban policy goals such as economic viability,environmental sustainability and social equity.Noting that lack of comparative data can prevent governments from taking decisive action, the paper examines the policy practices of almost 30 countries and gives 18 compact compact city indicators which can help governments to benchmark their results and improve their policy actions.The paper also makes five recommendations to assist government policy planning:National, regional and urban governments must work together and with other institutions to set explicit compact city goals which will help citizens and investors buy into the plan.Encourage density, particularly in new developments and synchronise urban and rural land-use policies Retrofit existing built-up areas, including industrial, business and residential, regenerate suburbs and promote public transport.Enhance diversity of land use and quality of life by mixing commercial and residential land use for easy access to jobs and public services, creating public parks and green spaces, and making it attractive for people to walk and cycle.Minimise advers effects of compact cities by limiting traffic congestion, encouraging affordable housing, promoting attractive urban design and public spaces, and greening built-up areas.