Experimentation with citizen participation in urban redevelopments is increasing worldwide. This paper aims to scrutinise this trend through an in-depth case study of the decisions and actions taken by the institutional stakeholders involved in participatory urban redevelopment in Tehran, Iran. The discussion is based around two contrasting urban redevelopment areas which set out to adopt a participatory approach involving various stakeholders including institutions (the Municipality of Tehran and the Heritage Organisation) and local owner-occupiers, developing new knowledge, understanding, and clarity about the concept and application of participation in urban redevelopments in developing countries. In both areas, the institutions invited owners to participate in the physical and economic improvements of their places through land assemblage or sharing redevelopment costs. In this study a range of qualitative methods are used including photo-elicitation techniques (PEI) and semi-structured interviews with locals, officials and professionals. The results show the vulnerability of the process. This was revealed when one institution did not maintain their role and when some owner-occupiers acted as free-riders. This highlights the challenge of building an enduring collaboration between institutional stakeholders from the planning to in-use stages, in particular the difficulties that arise as different institutions become involved in the process. This issue is more problematic when resources are limited and/or intermittent. As the results show, the institutional collaboration was smoother when fewer stakeholders were involved in decision making. In the commercial case, there were more complaints about overdue completion in the projects due to poor institutional collaboration. We recommend the need for an agreed mechanism prior to such initiatives where the role of the various stakeholders and their responsibilities are clearly cited, and where all different impact scenarios from the planning to in-use stage are set out.