With many cities in the Global South experiencing immense growth in informal settlements, city authorities frequently try to assert control over these settlements and their inhabitants through coercive measures such as threats of eviction, exclusion, blocked access to services and other forms of structural violence. Such coercive control is legitimized through the discursive formation of informal settlements as criminal and unsanitary, and of the residents as migrants and as temporary and illegitimate settlers. Using findings from ethnographic research carried out in two informal settlements in Dhaka, Bangladesh, this article explores how informal settlement residents engage with and resist territorial stigma in a rapidly growing Southern megacity. Findings show residents resist stigmatising narratives of neighbourhood blame by constructing counternarratives that frame informal settlements as a “good place for the poor.” These place-based narratives emerge from shared experiences of informality and associational life in a city where such populations are needed yet unwanted. While residents of these neighbourhoods are acutely aware of the temporariness and illegality of unauthorised settlements, these narratives produce solidarities to resist eviction and serve to legitimise their claim to the city.