Cities are seen as engines of development due to the fact that they represent concentration of different potentials, activities, advantages and specificities. They are also very often faced with development obstacles. Cohesion policy provides an opportunity to use the funds of the European Union and in the last programming period it highlights the need to promote urban development. The aim of this thesis is to present the role of the integrated territorial investments, as one the new instruments of the cohesion policy in the 2014-2020 programming period, which may be used to foster the role of cities and the effectiveness in the implementation of the integrated development approach. Special emphasis is given on the example of Croatia which has the opportunity to apply this new mechanism. The role of cities in regional development and connection between urban development and cohesion policy are presented, more detailed analysis of the funds which can be used in funding integrated territorial investments continues. The main part of this thesis is focused on defining and explaining the mechanism of the integrated territorial investments, with examples of good practices of urban development projects and the presentation of the initial activities in the implementation of the integrated territorial investments in Croatia. It is determined that integrated territorial investments provide opportunities to manage development activities on lower levels, with the obligation and advantages in preparing urban development strategies. This instrument can lead to more efficient utilisation of the urban development potentials, urban renewal, fostering the cooperation between urban areas and cooperation between different actors. It enables the implementation of the projects by combining different thematic areas, besides the advantages of co-financing. This work confirms the multiplicative role of this new instrument of the cohesion policy.