This paper contributes to the study of residents’ and civil servants’ transformative agency in urban development with the aid of the framework of cultural-historical activity theory. The aim is to investigate the emergence of trans-formative agency in five workshops, based on the method of Change Laboratory®, in the city of Espoo, Finland. The formative intervention focused on exploring the collaboration of residents and actors in urban development. The workshop discussions were analysed with the help of the manifestations of contradictions in neighbourhood development connected to the expression of the types of transformative agency and elements of the human activity system. This enabled the identification of the topics of the discussions and the development of transformative agency through envisioning the developmental potential of the activity and taking action to transform it. The findings call attention to creating the tools and means to facilitate the participation and building the transformative agency through time.