Despite the fact that vulnerable communities are the most affected by unplanned cities, considerably less attention has been given to involving them in urban development in order to ensure equitable outcomes. In this regard, there is an urgent need for governments to introduce and enforce processes that allow citizens, including vulnerable communities, to participate in development planning and policymaking. However, at present, there is a lack of guidance for practitioners regarding the definition of a clear purpose of community engagement and the selection of appropriate participatory methods to fulfil the set purpose. This study provides a thorough account of the participatory methods that can be used to achieve various engagement goals throughout the urban development process. This structured literature review used 71 reports published from 2000 to 2020. The review revealed 34 participatory methods, wherein most of the methods are devoted to informing, consulting and involving communities, whilst only a few methods are available for interactive public participation that supports true collaboration and empowerment. The study identified 12 purposes of community engagement in urban development, and mapped the 34 participatory methods for achieving them. The analysed case studies showed that the current community engagement practices are mainly in the pre-design and briefing stages of the urban development processes, and that most projects are aiming to achieve the ‘inform’ and ‘consult’ levels of engagement, with a few aiming to achieve the ‘involve’ and ‘collaborate’ levels. This study shows that community engagement is often overlooked during the professional design, development and post-development phases. The paper presents an onion model which can be used by practitioners to choose appropriate participatory methods based on the intended urban development phase, the engagement level and the purpose of the community engagement.