This paper explores current conceptual understanding of urban social, environmental, and health inequality and inequity, and looks at the impact of these processes on urban children and young people in the 21st century. This conceptual analysis was commissioned for a discussion paper for UNICEF's flagship publication: State of the World's Children 2012: Children in an Urban World. The aim of the paper is to examine evidence on the meaning of urban inequality and inequity for urban children and young people. It further looks at the controversial policies of targeting "vulnerable" young people, and policies to achieve the urban MDGs. Finally, the paper looks briefly at the potential of concepts such as environment justice and rights to change our understanding of urban inequality and inequity.