Informal settlements are on the frontline in the battle against climate change. Home to one billion people, their infrastructure deprivations pose challenges for the health and resilience of communities and ecosystems. Upgrading of informal settlements can improve urban services and infrastructure, strengthen tenure security, and empower local communities. This chapter examines the conceptual and practice relationships between climate resilience and in-situ upgrading. It critiques prevailing approaches, which centre upon threshold, coping, recovery, and adaptive capacities. Transformative capacity offers greater scope for addressing climate change impacts at a level commensurate with the size of the challenge, and for redressing the entrenched structural inequalities and deep socio-spatial injustices shaping cities in the Global South that perpetuate vulnerability and socio-spatial exclusion. Five elements are identified to advance transformative informal settlement upgrading: socio-technical innovation; a climate justice framing; greater attention to intersectional dimensions; inclusive governance and community empowerment; and fit for purpose finance.