REPUS focuses on new EU Member States and addresses the challenge of a more balanced and sustainable urban development. The European Spatial Development Perspective (ESDP) points out that urban polycentric systems are essential for a balanced and sustainable economic development of Europe. The main aim of the project is to build a Regional Polycentric Urban System (REPUS) in Central-Eastern Europe that contributes to an emerging Potential Economic Integrating Zone (PEIZ). This system will be based on small and medium-sized cities. The project plans to identify the potentials of regional urban systems including their functional roles and the urban hierarchies within the context of the whole European space. The most dynamic small and medium-sized cities could play an important role as potential regional capitals for developing new functional areas of integration. The linking of urban centres and rural areas will be intensified by strengthening the role of small towns. The effectiveness of urban policy should be improved by the project so that the institutional capacity can be enhanced within the ongoing decentralisation process.