Since the 1990s, there has been an active scientific discussion on collaborative (local/urban) governance and its relation to citizen participation. However, the governance literature has largely neglected the role of projects as policy tools especially in fields like urban policy. In my paper, I look at citizen participation in the EU-funded urban projects implemented in Finland in 2007–2013 under the Priority Axis 4: Development of Larger Urban Areas. In the projects, citizen participation is used as a form of empowerment of the worse-off neighbourhoods, as a way to produce new knowledge and as a development object for democratic innovations. Participation is also closely intertwined with the broader objectives of urban policy such as the prevention of segregation and the promotion of urban competitiveness.