Efficient space utilization to address territorial imbalances is one of the key conditions for ensuring Russia's national security. Achieving balanced spatial development necessitates tapping into and consolidating the potential of diverse types of locales. However, a substantial portion of the economic bonds forged during the Soviet era, particularly along the "city-village" axis, have been lost. The negative consequences of these processes have been acutely felt in the small towns of the North, which represent the predominant settlement type in this region. This article seeks to evaluate the state of affairs and establish the priorities for modernizing the economies of small Northern towns through the activation of intermunicipal economic ties. Methodologically, the study draws upon principles from regional, spatial, and urban economics, and harnesses data from Rosstat, SPARK and Contour.Focus databases, and local government reports. The article is based on case study, historical, economic, and statistical research methods. The novelty of the study lies in its assessment of the emergence and trajectory of economic relationships among small Northern towns in Russia. It unveils that in the post-Soviet period, city economies underwent simplification due to the collapse of certain specialized sectors at regional and local levels and the disintegration of economic ties between small towns and villages. However, cities embedded within networks of large vertically integrated corporations and exhibiting robust industrial connections with urban agglomerations possess the potential for modernization. Conversely, detachment from these networks can cause economic stagnation. The article underscores the priorities and instruments for revitalizing small towns, aimed at diversifying their economies by intensifying economic collaborations with major cities and rural areas within both traditional (industrial) and innovative economic sectors. The research results can serve as a scientific and methodological foundation for crafting development strategies and programs for small Northern towns. Further research avenues include substantiating promising city specializations at the macro and national levels.
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