When people hear about Rio de Janeiro, they often remember its beaches, beautiful women, natural beauty and its buildings. There is, however, an ugly side to Rio, the favelas. Today there are over 600 favelas in Rio, housing between 30 and 40% of the city's population of approximately 6 million. Most do not have running water, sewerage systems, electricity or telephones. About 50% lack indoor toilets. Most favelados are extremely poor, supporting their families on less than $100 US per month. There are few factory jobs, and many survive by polishing shoes, street vending or washing cars. About 50% of the females living in the favelas are employed as domestic servants in middle class and rich homes. In 2002, the film Cidade de Deus (City of God) was released, exposing to the world the hard life of the slum dwellers.

Rio has a rich heritage. The city was mostly a colonial capital until 1808, when Napoleon invaded Portugal and decided to ship the Portuguese royal family and most of the Lisbon nobles to Rio de Janeiro. The kingdom's capital was transferred to the city, making it the only European capital outside of Europe. As there was no space or housing to accommodate the sudden influx of noblemen, many inhabitants were simply evicted from their homes. The royals stayed on in Rio until 1821.

The favelas appeared in Rio around 1800 and slowly spread throughout the country. They housed the very poor who were just trying to survive. The favelas were usually very small, overcrowded, with insufficient lighting, ventilation, water and lacking a system for disposing of sewage. Those living closest to the nearest water source tended to fill the run off with their wastes, polluting the water of those below them. People became sick and the general health of the favelas deteriorated rapidly. In consequence, the favelas were blamed for the outbreak of diseases in Rio.

In 1898, a tenement housing more than 1000 people was demolished for sanitary reasons. More likely, its demise was due to Rio's bourgeoisie, who demanded that the favelas be erased. Neither the city nor the state had plans to deal with the displaced inhabitants. They were simply kicked out of their tenement and told to move on. Forbidden to live in the center of Rio de Janeiro, the poor built new houses on the outskirts of the city, wherever there was open space. Slowly, the favelas expanded around Rio, often living on hillsides unsuitable for profitable building.

In the 1990's, drug trafficking came to the crowded favelas. Crime rates soared. In 2001, between 80 and 110 people per 100,000 were killed as a result of gun violence. It became extremely dangerous for people to walk through the streets or stand near windows. In addition, the houses were packed so tightly together that fire and ambulance crews could not get around, ensuring disaster and loss of life in the case of fire or flood. In 2003, Mayor Cesar Maia announced an ambitious plan to spend one billion dollars to build roads, drainage systems, sports facilities and leisure areas in the favelas. Violent criminals, however, did not want this and clashed with the police. In 2004, the Brazilian President, Luiz Inacio Lula da Silva, sent 4,000 troops (1800 of the whom had been trained to combat urban and organized crime) to patrol the slums after the mayor of Rio requested assistance in quelling the gang violence after 10 people were killed in Rocinha, Rio's largest slum.

Some 6,600 people were killed in Rio in 2005. Today, the situation in the favelas has changed little. When the Rolling Stones played at Copacabana beach in Rio, 6,000 police were ordered into the favelas to prevent clashes, robberies and theft during the free mega-show attended by approximately 1.5 million people. Copacabana is noted for its prostitutes and drug dealers at night, and robberies often occur there during the daytime. Little can be done about the favelas in Rio.