This article examines a new phenomenon in the Gulf Cooperation Council (GCC) referred to as specialized cities (SC). These cities, in addition to being new towns, implement innovations in selected policy areas. This article goes beyond describing the spread of SC to answering a broader question: what motivates a GCC country to adopt such policy innovation? After a quantitative overview of the phenomenon, three cases have been selected to cover three main policy areas: energy, health care, and education, in Abu Dhabi Masdar City, Dubai Healthcare City, and Qatar Education City. A preliminary analysis of each of the cases is followed by a comparative approach that aims at discovering similarities and differences, as well as developing the basis for a preliminary analytical model that explains the driving factors behind these innovations. The country adoption of a policy innovation and its diffusion are mainly the results of geographical proximity and similarity, as these proximate countries tend to have similar economic aspects and common social problems that lead to similar policy action effects. Regional competition and positive reputational mechanisms are also particularly strong determinants for diffusion. The findings suggest that in the GCC region a diffusion of the phenomena is occurring, rather than that of a specific type of SC.A specialized city (SC) is a new town, a city in-the-city, which implements innovations in selected policy areas. The study reports on three such cities: Dubai Healthcare City, Abu Dhabi Masdar City, and Qatar Education City. The cases are selected for the special considerations outlined below, and are studied using two different research approaches: desk research and a combination of a variety of research tools.The first approach was intended to elicit basic background information and documentation, and to provide the author with the identities of the different stakeholders who would become key informants. The second approach was intended to obtain richer quantitative and qualitative data. The preliminary analysis of each of the cases is followed by a comparative approach that aims at discovering similarities and differences.The spread of the SC in the Gulf Cooperation Council (GCC) countries can be explained within the theoretical framework of policy innovation and diffusion. The