In Albania, the question of informality, despite some unsystematic initiatives to identify adequate solutions, still remains an unsolved issue. Almost three decades of uncontrolled development caused the illegal exploitation of social, economic, territorial and historical values. Differently from what has been commonly acknowledged, the process of informality is far from being exclusively a territorial issue but rather, it involves a wide range of the societal urban life. This paper demonstrates how informality became institutionalised and what that means for the current territorial development. Adopting a critical perspective, it draws a series of analytical categories based on which urban informality has been generally categorised in the literature. Secondly, it presents an overview on the main informal settlements and practices in Albania, tracing a common path along the process of institutionalisation of informality, by linking the existing problematic territorial development issues (among others flood risk, environmental protection, urban pollution etc.) to the persistence of informal development. Finally, it advances some consideration and general remarks to policy makers.