<p>Socio-spatial polarization is a major concern for the rapidly growing contemporary cities. It is evident from the increasing proportions of high and low-income populations in the overall population mix and their growing social disparities. While Indian cities have undergone polarization issues in recent decades, how these changes play out at the local level and what socioeconomic and physical specificities they are associated with are little explored. This study examines these dynamics through empirical evidence from Hyderabad, India. Using real estate prices and slum populations, the study first identifies the polarized localities. Within these polarized localities, it conducts in-depth analysis of six case study locations through visual surveys and semi-structured interviews to comprehend their socioeconomic (occupational characteristics and ethnicity) and physical (housing typology and access to infrastructure) attributes. The analysis reveals Hyderabad’s segregation into four zones: advantaged areas, polarized areas, disadvantaged areas, and peripheral zones. The polarized localities experience polarization either through the growth of migrant clusters near affluent enclaves or through gentrification-driven restructurings in informal settlements. Informal settlers have strong economic connections with their affluent surroundings, allowing them to coexist in the same place. Their coexistence, however, does not signify social mix, as they do not share space frequently and experience splintering in urban services, leading to micro-fragmentation. This study contributes to urban scholarship by demonstrating how polarization manifests in the social and spatial fabric of neighborhoods. The findings underscore the need for inclusive planning strategies that mitigate micro-level fragmentation while preserving the economic interdependencies between different income groups.</p>