This article explores the failure of urban renewal in Bombay city during the first quarter of the twentieth century. It shows how colonial rule structured a class-driven process of uneven urban ‘improvements’ that actually exacerbated the problems of congestion, bad housing and environmental blight. In this process, the new forces of modernity were selectively appropriated to accentuate the differentiation in built forms and urban spaces. Finally, through implicit comparisons with contemporary developments in Europe, it reveals the limitations of urban regeneration in a laissez-faire colonial capitalist environment where the search for quick returns by competing economic actors precluded the adoption of long-term policies and interventionist strategies necessary to create the good city life.