Urban Fantasy is a genre of fiction that mixes Fantasy elements with Urban ones. It is characterized by fantasious characters and concepts placed in a real world urban setting.

Urban Fantasy may be set in an approximation of our world in which the fantastic exists secretly or in a world (such as an alternative history) in which it occurs openly (or some combination of the above). Elements such as magic, paranormal beings, other worlds and so on, may exist here. Common themes include coexistence or conflict between humans and other beings, and the changes such characters and events bring to local life.

The term began to come into its present use in the late 1980s and early 1990s. This development is apparent in the increased use of the term in contemporary reviews.

Terri Windling's shared Borderlands universe, made up of a number of anthologies and novels, launched with the eponymous paperback original anthology, Borderland in 1986, followed up by Bordertown , also in 1986. The series was later touted by Neil Gaiman as "one of the most important places where Urban Fantasy began". An article in Tor.com has stated that "some say, Urban Fantasy was born in Bordertown," which provided "young, beginning writers like Charles de Lint and Emma Bull" with a platform. Emma Bull's unrelated 1987 urban fantasy War for the Oaks , where fairy factions battle in present-day Minneapolis, also received interest and attention. Both Bull's novel and the Borderlands books emphasized young, poor, hip protagonists. In this, they had much in common with the usual protagonist of the cyberpunk sub-genre of science fiction.

Sweet Silver Blues a 1987 novel by fantasy author Glen Cook began his Garrett P.I. series. These chronicled the adventures of a hardboiled detective in a fantasy world.

Shadowrun , a tabletop RPG with a similar concept to the Borderlands universe appeared. Like those earlier books, Shadowrun took place in a future Earth setting (specifically 2050, in the first edition), after the reappearance of supernatural powers and beings. Players could play humans (cybernetically enhanced or otherwise), elves, dwarves or orcs, all in a dark high tech setting. The more definitely cyberpunk approach (jaundiced and gritty) of the game's universe exerted its own influence.

Typically cities in the modern world are common, but they may also be in an alternate world or universe, or smaller town, and can have elements such as:

The fashion of Urban fantasy is much like the fashion of Urbancore, streetwear, or just modern clothing, but all mixed with fantasy elements (ex. jeans and a T-shirt paired with fairy wings, a crown and glittery makeup).