Ghana's transition to democratic and decentralised governance has profoundly altered the context for community action in urban services upgrading. In this article, variations in the way communities have managed to grasp new opportunities are discussed and related to the concept of social capital. Attention is given to the roles of local leaders, levels of internal social cohesion, and the nature of interactions between leaders and followers, and between leaders and the local state. Several threats to effective community action are identified, including: arbitrary and clientelistic politics; restricted opportunities for ordinary citizens to voice their needs; distrust towards the local authorities; and the absence of leaders who can make a difference. The continued importance of the chieftaincy institution in community action, due to its control over land and the reverence and recognition accorded it in local culture, is underscored. Finally, some critical remarks are made regarding the impact of formal institutional reform and the importance of social capital.