Brazil has a relatively high reported level of urbanization, with 81 out of every 100 Brazilians living in cities. The criteria used by the IBGE (Brazilian Institute of Geography and Statistics) in determining whether households are urban or rural, however, is based on political divisions, not on the built environment.

A town is any seat of a district (the lowest political division); a city is the seat of a municipality. Nowadays, the country has more than 5,564 municipalities. About 81.3% of Brazilians live in an urban area.

State capitals are usually also the largest city in their respective state, exceptions being Vitória in Espírito Santo, and Florianópolis, the capital of Santa Catarina; there are also non-capital metropolitan areas in São Paulo (Campinas, Santos, Paraíba Valley), Minas Gerais (Vale do Aço), Bahia (Feira de Santana), Rio Grande do Sul (Sinos Valley) and Santa Catarina (Joinville & Itajaí Valley). Most of the non-capital large cities in Brazil are in the states of São Paulo, Rio de Janeiro, Minas Gerais, Santa Catarina, Bahia and Paraná.