This study explores the main impacts of the smart city transition on our cities and, in particular, on citizens and territories. In our research, we start from an analysis of smart city use cases to identify a set of key challenges, and elaborate on the main accelerating factors that may amplify or contain their impact on particular groups and territories. We then present an account of best practices that can help mitigate or prevent such challenges, and make some general observations on their scalability and replicability. Finally, based on an analysis of EU regulatory frameworks and a mapping of current or upcoming initiatives in the domain of smart city innovation, capacity-building and knowledge capitalisation, we propose six policy options to inform future policy-making at EU level to support a more inclusive smart city transition.