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This thesis contributes to the growing EU-US literature by comparing and explaining the evolution of urban policy in these two federal systems. The thesis begins with a puzzle: after introducing two similar and equally short-lived regeneration schemes—Model Cities (MC) (1967) and URBAN (1994)—the US and the EU followed different paths: the former replaced MC with the durable Community Development Block Grant (CDBG) in 1974, while the latter ended urban policy by ‘mainstreaming’ URBAN in its regional policy in 2006. To solve the puzzle I formulate a two-part argument: first, I explain the similarities between MC and URBAN as resulting from three factors: a favourable political context, holistic urban policy ideas, and centre-periphery mistrust. I then explain subsequent trajectories by looking at the interplay of policy and politico-constitutional institutions. While both MC and URBAN were unable to ‘stick’ because of their inherent weaknesses, the result of their demise depended on the existence of a federal ‘city welfare’ state. In the US, the Housing and Urban Development Department (HUD) embodied this state, and channelled Nixon’s attacks on MC into the creation of the structurally stronger CDBG. In the EU, conversely, DG Regio could not provide a comparable anchor for urban policy: when URBAN was attacked by regions and cities, the DG just reverted to its ‘business as usual’ by mainstreaming the programme. I test my argument with a macro-historical comparison of the two cases and four in-depth city studies—Arlington, VA and Baltimore, MD on the US side, and Bristol, UK and Pescara, Italy on the EU side—aimed at analysing micro-level institutional dynamics. In both parts of the study I use a wide range of sources: secondary and grey literature, statistical sources and, especially, archival material and elite interviews. At both levels of analysis the test confirms my argument.