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Informal urban activities employ over 70 percent of the urban residents in Nigeria. They include a wide range of activities; trading, cottages industries and tertiary services. They are often not given adequate attention by policy makers, urban managers and planning authorities in terms of their contributions to the urban economy, employment, urban vitality of third cities and land use planning. This publication examines, the characteristics, challenges and prospects of informal land use activities in Jos Nigeria and argues for their deliberate integration and regularization in the urban economy, urban land use planning and management. The informal economy holds bright prospects for economic sustainability, employment and in addressing the challenges and fall in the formal economy and tackling the burgeoning urban population growth in Nigeria and other third cities.