A shanty town or squatter area is a settlement of improvised buildings known as shanties or shacks, typically made of materials such as mud and wood. A typical shanty town is squatted and in the beginning lacks adequate infrastructure, including proper sanitation, safe water supply, electricity and street drainage. Over time, shanty towns can develop their infrastructure and even change into middle class neighbourhoods. They can be small informal settlements or they can house millions of people.

The term 'shanty' is likely derived from Canadian French 'chantier' (low-level workers' quarters), or alternatively from Scottish Gaelic; "sean" (pronounced: shen) meaning 'old' and "taigh" meaning 'house[hold]'.

Globally, some of the largest shanty towns are Ciudad Neza in Mexico, Orangi in Pakistan and Dharavi in India. They are known by various names in different places, such as favela in Brazil, villa miseria in Argentina and gecekondu in Turkey. Shanty towns are mostly found in developing nations, but also in the cities of developed nations, such as Athens, Los Angeles, and Madrid. Cañada Real is considered the largest informal settlement in Europe, and Skid Row is an infamous shanty town in Los Angeles. Shanty towns are sometimes found on places such as railway sidings, swampland or disputed building projects.