In a world in which more than half of the population lives in cities, rising urban violence has emerged as a huge concern of policymakers, especially as it is a major challenge to development in the Global South. The most marginalized- the urban poor-suffer more as violence is concentrated in their living spaces. This study aims to explain the political economy of urban violence in Bangladesh. As the capital of Bangladesh, Dhaka city has become a highly unequal society where neoliberal economic restructuring is continuously depriving the urban poor of all sorts of urban services. It addresses privatization of the urban space and exclusion of the urban poor which make them often violent. It further explores the governance of urban violence by the neoliberal state. The paper is based on data collected from the city of Dhaka where millions of urban poor are struggling for shelters. It reveals that the urban poor is the victims of neoliberal urban development as they are being displaced from where they used to live as squatters for a long period. Due to their poverty and marginality, they are unable to get shelter nearby the places they were living. Many of them move to suburban Dhaka where they often struggle to get jobs. Neoliberal urban development often causes violence and protests in the city of Dhaka. It also reveals that the neoliberal state uses security forces to evict the urban poor and compel them to move to the urban peripheries. However, the paper argues that increasing urban violence in the city of Dhaka is linked to the privatization of urban space and the exclusion of the urban poor from neoliberal urban development. It further argues that the neoliberal state serves the interests of affluent and business people ignoring the right of the millions of urban poor to the city.