To provide insight into Afghanistan’s economy, I examine the determinants of the urbanization rate and urbanization growth over the past few decades. To do so, this paper examines new provincial level data on urbanization, ethnic diversity, neighbor country market potential (the degree of economic activity in neighboring countries weighted by the province’s distance from each country), conflict, institutions and geography. When all provinces are included, I find weak evidence for the importance of geography in explaining the urbanization rate. In contrast, I do not find any evidence of the importance of institutions or ethnic diversity. For urbanization growth, I find evidence that the change in neighbor country market potential has some explanatory power from 2003 to 2008 but not for 1979 to 2003 while conflict surprisingly does not have explanatory power for either period. For all provinces other than Kabul, I find similar results except that the evidence for the geographical endowments is much stronger. The results imply that while Afghanistan’s economy may be burdened by its geography, its urbanization could be improved by increasing its transport infrastructure.