This paper provides an explanation of when and why came the need to develop smart cities and how they should be developed. Circulation of data and information within the city's infrastructure is very important so that city can develop into a smart city that uses information, knowledge and capabilities for the benefit of its citizens. The paper is structured into seven main sections – covering the need for development and the concept of a smart city, system for developing smart cities in Europe, financing projects and examples of the most important smart cities in Europe. It is explained what means digitalization of city infrastructure and how ordinary infrastructure becomes smart infrastructure. Next chapter deals with individual pieces of smart infrastructure with examples for better understanding. Finally, as an example, the smart London case and the city's infrastructure development plan are presented. The last section will conclude all of the above. The development of smart cities is a necessary phenomenon in urban communities, which emphasizes the establishment of an environmentally sustainable everyday life for citizens. In order to make it as successful as possible, it is necessary to build, maintain and upgrade the city's infrastructure. The basic infrastructure of the city must be connected to the information infrastructure, which would mean that the implementation of technologies in various urban systems (spatial planning, transport, public safety, waste management, water supply, etc.) allows the collection, processing and analysis of data. The information obtained from this process can maximize the benefits of already existing city systems and also see their shortcomings. Sensor integration is key in this whole story about Smart Cities. Setting up sensors to collect data in traffic, water and electricity consumption, waste collection, use of lighting and more allows the monitoring of the actual situation and generating ideas on the optimal use of resources in the city. In this way, the information obtained also allows for healthy action to be taken before problems arise in certain sectors, since the future situation will be easily predicted on the basis of available information on the current state.