This dissertation examines the relationship between urbanization and the dual structure in China by focusing on "villages-in-the-city" (chengzhongcun). The dual structure of rural-urban divide is the foundation of Chinese urbanization. It is the hukou, dual land ownership, and the dual structure of housing ownership that fundamentally shapes the rural-urban divide and sets Chinese urbanization apart from other countries. At the local level, city governments have shown characteristics of "local growth politics" and use a "land-revenue" strategy to stimulate local economic development. There were "half-urban-and-half-rural" hybrid outcomes in state-led and multi-dimensional urbanization process; migrant workers and "villages-in-the-city" are one of the hybrids. Without the essential reforms of the dual structure, though, Chinese attempts to eliminate the dual structure will not succeed as new chengzhongcun may emerge. This dissertation examines Guangzhou, a municipality with about 138 chengzhongcun, and investigates the dual structures of hukou, land, housing, administrative system and local governance in relation to chengzhongcun since 2000. Two chengzhongcun, Liede and Yangji, were examined. They have displayed different outcomes in response to the rapid urbanization and the radical redevelopment project of the Guangzhou Municipal Government. Liede was completely demolished and redeveloped while the redevelopment of Yangji was halted because of resistance from local villagers. The dissertation also examines the social stratification within chengzhongcun that stems from the interplay between the dual structure and urbanization. The case study reveals that both formal institutions, such as hukou, land, local governance and public finance, and informal institutions, like clans, traditions, and other local historically rooted cultural factors and social relations, have influenced the process of redevelopment of chengzhongcun in Guangzhou. The dissertation bridges gaps in the urbanization literature by analyzing chengzhongcun from the lens of China's dual structure. The study on institutional reforms, physical redevelopment, and the roles played by different actors including local governments, village committees, native villagers, and migrants in chengzhongcun opens a new path to examine urbanization in China.