In this chapter, the authors present an argument and illustrations for how transdisciplinary research and education in close collaboration between universities and non-academic partners in municipalities can contribute to building transformative capacities in cities to tackle grand societal challenges such as climate change. Governing transformative change requires new types of capacities and capabilities of the public sector such as new organizational structures, competencies, and administrative rules and processes. Current urban governance structures often are not adequate to deal with the type of challenges urban sustainability transitions pose: the systemic nature of the problems, the absence of clearly defined solutions in combination with a high level of uncertainty about goals and pathways to reach them, the long-time-perspective and complexity of change processes which need to involve a broad range of actors and stakeholders, or the need to work across different sectors and policy fields. Boundary-crossing research and education activities between universities and the public sector can simultaneously enhance our understanding of new governance strategies for transformative change and our joint capacity to implement them. In this chapter, the authors draw on examples of such collaborations which are dealing with key elements of urban transformative capacities such as a better understanding of systemic dimensions of change, a shift to experimental governance approaches, and at the same time systemic integration of experiments and initiatives, the development of processes for reflexive monitoring and learning, or the need to integrate policy areas such as climate and social policy.