The context of this report is the call by the Department of Human Settlements (DHS) to conduct a study for the future impact evaluation of informal settlements targeted for upgrading. The purpose of the study is to collect data for use by the Department of Human Settlements (DHS) in achieving the following specific objectives: 1. Strengthen implementation and improve the performance of the Upgrading of Informal Settlements Programme 2. Determine the nature and sustainability of the Upgrading of Informal Settlements Programme outcomes 3. Determine measureable impacts on beneficiaries and communities that the upgrading of Informal Settlements Programme produces The first phase of the study is contained in the inception report submitted to the DHS and which addressed concerns around our understanding of the context of informal settlements internationally and in South Africa. The current literature review report delves further into the existing literature on informal settlements, upgrading programmes, and indicators of upgrading internationally. In the South African context, we provide the policy context of informal settlement upgrading, the theory of change that informs it with a view of further understanding the effectiveness of the upgrading of informal settlements programme (UISP). This review is guided by the terms of reference (TOR) as presented in the section that follows as well as the research questions that we seek to address in conducting the current study.