This paper traces two dominant approaches to state-led spatial transformation evident in South African cities: the institutional reform approach and the project-focussed approach. The institutional reform approach works to create strong local systems which, over time, can produce new and different urban outcomes. The project-focussed approach aims to transform space through the development of large projects which themselves alter the urban form. Within South Africa's national urban policy debates, both approaches are currently being promoted. In this paper, we discuss these competing narratives and the stakes, particularly for South African cities.