The paper focuses on the role of public-private partnership as a tool that can facilitate smart transformation of cities and regions ensuring wider range of opportunities for various stakeholders including citizens, business actors, authorities, educational institutions, NGOs and so on, as well as create a more sustainable economic and social environment. Particular attention is paid to the experience of the leading smart communities in different countries, in terms of the applied models of private-public cooperation. The SWOT-analysis of the PPP concept in smart cities is conducted based on which the conclusions regarding its impacts and potential are made. Based on the recent trends in urban development the importance of searching for new approaches to the city governance, in order to deal with the challenges more efficiently and provide better services for the citizens, is highlighted. The concepts of Smart Cities are viewed as powerful vehicles for fostering urban prosperity.