Urban “spaces of possibility” for sustainable urban development are constituted to a significant extent by the spaces opened up for imaginative processes, enriching urban imaginaries with potentially radical imagination and pointing towards possibilities for urban transformation. Spaces of possibility are both spaces of imagination and spaces of experimentation, and the integration of imaginative and experimental experiential processes enhances their relevance for potential urban transformations. This chapter focuses on the relationships between (physical, social, and mental) spaces fostering sustainability-related imagination and the unfolding imaginaries of sustainability in such spaces. It is based on the empirical investigation of the development of imagination and imaginaries across five grassroots initiatives/projects/networks in the city of Hanover, Germany (in the Linden district, alongside the Ihme River). The empirical research insights reveal how these imaginaries are both emplaced and place-making, how they facilitate cooperation in urban society through balancing dialogical and dialectic communication processes, and how experimentation and imagination are mutually constitutive in such spaces. These insights strongly suggest that urban imaginaries, when researched in relation to urban spaces of possibility and to (changes in) social institutions, should become a central concern in research into sustainable urban development.