Much research has been done on the causes of metropolitan consolidation and its rarity. However, the causes of metropolitan fragmentation are rarely considered. Without considering the reasons for fragmentation, it is difficult to make wise decisions, especially when state policies granting power to local governments cause fragmentation. This article proposes that city formation follows a niche model, much like the formation of interest groups, and that the factors governing interest group origination also affect city formation. To form, cities need residents, resources and entrepreneurs to come together such that a new city can be affordably created. It tests this theory against data from the US Census of Governments and other sources, and finds that Metropolitan Statistical Areas (MSA’s) fragment differently from non-MSA counties, state grants of local power increase fragmentation, and more resources allow for more fragmentation. It concludes with a discussion of the results and how they should influence urban policy.