Urban resource management demands greater efficiency to address the growing challenge of resource use in cities. Urban Metabolism (UM) is a fundamental approach that quantifies energy, water, and material flows within urban environments, providing a foundation for policy development. However, UM often overlooks informal flows—unregulated resource processes that play a significant role in many regions, particularly in developing countries, operating outside the oversight of public institutions. This paper addresses two primary objectives. First, it offers a structured characterization and holistic definition of informality, analyzing its diverse forms across water, energy, waste management, food production, and mobility sectors. Second, it introduces an expanded UM framework that integrates informal flows. This approach has the potential to help policymakers with a comprehensive tool to address resource management challenges more inclusively by including these informal systems. Key findings highlight three significant policy implications: integrating informal and formal systems is complex, hence this requires flexible and adaptive regulatory frameworks; the exacerbation of social injustices through informal flows and inequalities—especially concerning access, affordability, and gender disparities—underscoring the need for targeted, equity-focused policies; and the human-centric nature of informal systems, emphasizing the importance of engaging informal actors in policy development and land-use planning. The expanded UM framework fosters the creation of transparent, equitable, and effective policies that, in theory, can bridge the gap between formal and informal systems, enhancing resource governance, social equity, and sustainable urban development.