This article tries to explain the position of urban social policy in Iran based on upstream legal documents and approvals related to city associations and municipalities. Simultaneously with the Constitutional Revolution and the establishment of the National Assembly in 1286 AH, which paved the way for the emergence of a modern government in Iran, ruling actors in the city also took on a new role. Municipalities have become a major player in helping the government to ensure the welfare of vulnerable social groups and provide various welfare services to these groups, and a kind of restorative municipality is born. In this article, relying on the qualitative method with the technique of document content analysis, we have tried to review all the laws related to municipalities during the 70-year period until the Islamic Revolution and discover and extract themes related to ensuring the welfare of citizens and social groups. The findings indicate that municipalities initially played a minimal restorative role in ensuring the welfare of citizens, but with the establishment of the modern developmental government, various social groups became the target of municipal policy and more welfare services were provided by this institution. The intensification of development and widespread migration to cities and the formation of the urban lower class, made social policy “reducing urban poverty” more complex and highlighted the role of municipalities. Thus, the municipality became one of the most important institutional barriers to reducing urban poverty, and excluded some of the social groups involved in the city's informal economy, such as peddlers and vagrants, from the urban life cycle.