We explore the effects of the growing urbanization of rural areas in Chile, Colombia, and Mexico and investigate whether the presence of small- and medium-sized cities within rural urban territories enhances economic growth and reduces poverty and income inequality compared to deep-rural and metropolitan territories. For Chile and Colombia, our results suggest that these urban centers can make a greater contribution to the rate of economic growth and poverty reduction in rural urban territories compared to deep-rural ones, but in some cases with a rise in income inequality. The mechanisms through which urban centers affect the dynamics of territorial development are country-specific. (C) 2015 Published by Elsevier Ltd.