Damage caused by badger setts is an important source of human–carnivore conflict in urban areas of the UK, yet little is known about the spatial distribution of urban badger setts or their pattern of occupation. We compared the density, spatial distribution and size of setts in four urban and two rural study areas in the UK and assessed the applicability to urban systems of distinguishing between ‘main’ and ‘outlier’ setts. In addition, we used radio-telemetry to investigate diurnal patterns of sett use in one urban area (Brighton). It was possible to distinguish between main and outlier setts in urban environments, and local sett densities were comparable in urban and rural areas. However, urban badgers used substantially fewer setts than did a nearby rural population, and they spent a smaller proportion of days in outlier setts. Social groups with larger ranges had more setts available to them and, within groups, individuals with larger ranges used more setts. Outliers appeared to serve multiple functions, including allowing efficient and safe travel to important parts of the home range. We conclude that sett densities can be high in urban habitats, suggesting significant potential for sett-related problems to arise. The fact that urban main setts can be distinguished from outliers enables management actions to be tailored accordingly. In particular, because main setts seem to represent a particularly valuable resource to urban badgers, alternatives to the closure of problem main setts need to be considered.