During the last few decades, the city of Hamedan has experienced extensive growth and change, which have led among other things to the emergence and expansion of the city’s slums. This article has been prepared based on the results of the authors’ field survey in the period 2005/6-2008/9 as well as supplementary information collected through some important social studies in the slum areas of Hamedan. Results indicate the importance of rural-urban migration in the expansion of Hamedan and the growth of its slums which now comprise 30 percent of the city. Furthermore, marginalization is found to be a serious challenge to sustainable and healthy urbanization. Marginalization is associated with high rates of addiction and prostitution in Dizaji, youth crime in Khazer, and dilapidated infrastructure in Nabowaat.