At the beginning of the twenty-first century, the network of urban settlements in Serbia was characterized by uneven development. Significant differences in population concentration and degree of economic development of different categories of cities led to regional urban disparities. These disparities are probably the result of regional and local specificities, such as spatial, demographic, economic, and functional, as the region of Southern and Eastern Serbia is the most depopulated region in the country. The present work focuses on analyzing the intensity and dynamics of urban changes in the Region of Southern and Eastern Serbia and classifying cities according to the different urban development paths. The typological classification was performed using the K-means clustering algorithm. The cluster analysis is based on relevant demographic and socioeconomic indicators from 2002 to 2011. After the analysis, three types of cities were distinguished according to the different paths and intensity of urban development: stagnant cities with shrinkage tendencies, slight shrinkage cities, and severe shrinkage cities. The objective of the analysis is to disentangle these complex inequalities between cities and examine the impact of urban development on intra-regional differentiation. The empirical findings provide a better understanding of the heterogeneity of urban space due to the different levels of their urban development paths. In addition, the study contributes to the knowledge of intra-regional differentiation in this part of the country.