Abstract: Public debate periodically erupts over definitions of urban graffiti as either ‘street art’ or ‘vandalism’. Our focus in this paper is on the ways graffiti is seen by residents to contribute to or damage urban character or place identity. Through interviews and mapping in two case studies of inner-city Melbourne we examine the ways graffiti infiltrates particular urban contexts. The paper maps the ways the potential for different types of graffiti – tags, throwups, stencils, pasteups and pieces – is mediated by the micro-morphology of the city and its public/private interfaces. We explore the ways graffiti negotiates ambiguous territories combining public/private, visible/invisible, street/laneway and art/advertising. The paper also explores the intersecting and often conflicting desires to establish territory, to avoid arrest, to create art, to purify the neighbourhood, to create and protect urban character. The paper concludes that the contribution of graffiti to urban character and place intensity in some locations is seen by residents as profoundly, but not exclusively, positive. The desire to erase graffiti is productive of new work; the desire to promote or protect it is more problematic.