This dissertation attempts to examine the effect of urbanization on poverty reduction outcomes by considering various dimensions of poverty and channels of reducing poverty. First, we develop a theoretical model in order to infer a relationship between urbanization and poverty reduction outcomes. Specifically, it shows an optimal level of urbanization to properly allocate basic public infrastructure and promote pro-poor growth. Second, we conduct empirical analysis on international data to examine the testable hypotheses that are derived from the theoretical model. Further, we explore the “channeled effects” of urbanization on basic education and health by the IV estimation and on productivity by the dynamic panel GMM estimation. As the theoretical model suggests, our results exhibit the statistically significant relationship in a non-linear form between urbanization and poverty. In addition, we explore the impact of urbanization on poverty reduction outcomes in different regions in order to see the various magnitudes of urbanization effects among regions.