One of the key functions of Government or leadership at every level is to foster progressive change and transformation of communities. This explains why successive leadership in Nigeria as in other parts of the world initiate developmental projects and programmes targeted at transforming communities to make life more enjoyable for residents. Most of these development efforts are focused on urban communities since that is where you have a large proportion of population and elites. However, government and other development partners often take the initiative of deciding what type of transformation is appropriate for these urban centres and go on to implement them without recourse to community input. This negates the principle of community
development. The functional approach to community development emphasizes the needs for all relevant stakeholders including the residents to play their roles in improving the quality of life in these areas. This study, therefore, shed light on the operational process of the functional approach and the potential it has in accelerating urban transformation process. The paper further examined the challenges of transforming urban communities which include insecurity, corruption, over-population among others.