This paper takes the Nan Chi Chang Community as a case study of the formation of urban slums in Taipei City. Nan Chi Chang Community, as is the case with other resettled tenement communities built between 1962 and 1975 to resettle squatter residents, has been identified by government officers, the media and even the residents themselves as being in urgent need of renewal. Why is it that a resettlement project for squatter clearance seems unable to avoid becoming a slum few decades later? It is argued in this paper that the spatial and social processes of slum creation should be thoroughly understood before any renewal project is initiated. If this is not the case, there is the distinct possibility that the slum will merely continue in the same place or be transferred to another place. The paper focuses on an examination of the often unique characteristics of slum communities in Taipei City and in particular the processes of slum creation that have obtained during the past four decades.