Trends in regional disparities have been a major issue in regional science for many decades and knowledge of ways to overcome such disparities has great importance for regional policy-making. Strong initial differences between regions affect the capacity of each region to grow and their ability to respond to challenges imposed externally, for instance globalisation and growing international competition and trade (Cuadrado-Roura, 2001). Initial differences can relate to a wide variety of factors, for instance the availability of human resources, the accessibility of a region and the presence of advanced production services. A factor that gets increasing attention is the city system. Flourishing regions can often count on a large, well-accessible and internationally known city or regional clusters of cities. Concentration of support to dynamic growth poles would be an engine for growth of the whole country (or regions) through regional spillovers (Perroux 1955 and Kaldor 1970) Particularly also in regional and spatial policies addressing regional disparities attention is paid to the city system. It has been suggested that polycentric development can be instrumental to reducing regional disparities, see for instance in the European Spatial Development Perspective (CEC, 1999) and the Second Cohesion Report (CEC, 2001). In the Third Cohesion Report the main emphasis is territorial cohesion, which is placed on an equal footing as economic and social cohesion in the (unratified) Constitutional Treaty. Within the discussion on territorial cohesion polycentricity gets much emphasis (Faludi, 2005). Also many European countries pursue a polycentric development, often addressing the dominance of their prime city to diminish regional disparities. Apparently, policy makers assume a strong relationship between the urban system and the persistence of regional disparities. However, this assumption lacks empirical justification. The aim of this paper is to test the hypothesis that a polycentric city system leads to less regional disparities. The paper presents measures of the extent of polycentricity of the national urban systems of 26 European countries. This data is linked with calculations of regional disparities within these 26 countries. Are countries with a relatively polycentric urban system characterised by less regional disparities than more monocentric countries? And, what are the consequences of our findings for regional development policies?