ABSTRACT: Transit-oriented development (TOD) is becoming increasingly popular with governments, planners and developers, particularly in cities designed for and highly dependent on private vehicle travel and suffering the disadvantages of the resulting urban sprawl. In a world faced with energy, water and climate challenges, successful TODs have the potential to address pressing environmental and social issues such as environmental sustainability, housing affordability and the need for healthy, resilient and adaptable communities. This paper draws on studies of international practice, particularly in US cities comparable in density and level of car dependence to Australian cities. Major obstacles to TOD and factors which lead to optimal developments are examined, as well as the potential benefits of TOD. While TOD has drawn criticism from various quarters, this paper argues that much that has been labelled TOD is lacking in the transit focussed planning, quality and range of amenities, diversity of site use and housing as well as the ‘walkability’ needed for vibrant, sustainable communities to emerge, and hence should not be classified as TOD.