This paper analyzes the relationship between urban governance and social cohesion, stressing the relevance of multilevel policies as well as citizenship practices. It seeks to provide a critical understanding of social cohesion as a policy aim for European cities, seeing governance dynamics within the frame of the transformation of the state and the emergence of complex multi-scalar decision-making processes. Beginning with a review of the literature on the transformation of the state with regard to the emergence of a governance-based approach in policy practice, it then offers several examples of new modes of governance in different policy fields, stressing the relationship between governance and territorial cohesion as well as the need for context-sensitive analysis. Thirdly, it addresses the relevance of participatory democracy, social innovation and citizens‟ practices in fostering democracy, and argues that the analysis of governance should reincorporate the idea of conflict and counter-hegemonic citizenship practices.