Urban growth is a significant trend in Africa. Scholarly attention and urban planning efforts have focused disproportionately on the challenges of big cities, while small and medium-sized urban settlements are growing most rapidly and house the majority of urban residents. Small towns have received some attention, but very few studies have focused on secondary cities. This paper offers a study of urban transformations, migration and residential mobility patterns in Arusha, a rapidly growing secondary city of Tanzania. Arusha functions as a major attraction for migrants and in-migration is a central dynamic shaping transformation processes in central areas characterized by high population turnovers, vibrant rental markets and widespread landlordism. There is also a considerable degree of intra-urban residential mobility within and between central areas. Intra-urban residential mobility is the most important dynamic shaping transformation processes in peripheral areas characterized by long-term urban residents moving from central parts of the city as part of a process of establishing themselves as homeowners. Overall, the paper provides crucial insights on how migration and residential mobility patterns influence processes of urban growth and transformation in the context of large secondary city, and thereby contributes to fill a significant knowledge gap on secondary cities in Africa.