Antimicrobial resistance (AMR) is a growing public health challenge that is expected to disproportionately burden lower- and middle-income countries (LMICs) in the coming decades. Although the contributions of human and veterinary antibiotic misuse to this crisis are well-recognized, environmental transmission (via water, soil or food contaminated with human and animal faeces) has been given less attention as a global driver of AMR, especially in urban informal settlements in LMICs—commonly known as ‘shanty towns’ or ‘slums’. These settlements may be unique hotspots for environmental AMR transmission given: (1) the high density of humans, livestock and vermin living in close proximity; (2) frequent antibiotic misuse; and (3) insufficient drinking water, drainage and sanitation infrastructure. Here, we highlight the need for strategies to disrupt environmental AMR transmission in urban informal settlements. We propose that water and waste infrastructure improvements tailored to these settings should be evaluated for their effectiveness in limiting environmental AMR dissemination, lowering the community-level burden of antimicrobial-resistant infections and preventing antibiotic misuse. We also suggest that additional research is directed towards developing economic and legal incentives for evaluating and implementing water and waste infrastructure in these settings. Given that almost 90% of urban population growth will occur in regions predicted to be most burdened by the AMR crisis, there is an urgent need to build effective, evidence-based policies that could influence massive investments in the built urban environment in LMICs over the next few decades.