Cape Town is one of the largest cities in South Africa. It has an estimated 193,000 households living in 204 informal settlements. Part of the attempt to meet housing and infrastructure needs has been the upgrading of these informal settlements. Numerous upgraded sites have, however, failed to meet the needs of those living in them and residents have started engaging in various forms of counter-conduct. This paper explores this counter-conduct, identifying the specific counter-conduct activities that have surfaced and establishing why this counter-conduct has manifested in these settlements. It also identifies and discusses the governmentality guiding this counter-conduct (a topic which has been neglected in the literature). Two case studies, Makhaza and New Rest (Cape Town), were used in the research. The study found that the counter-conduct most prevalent in the upgraded settlements was the construction of backyard-shacks, setting up illegal electricity and water connections and establishing informal home-based businesses. This counter-conduct has come about due to the conflicting governmentalities that exit between the residents and the local municipality. The clash in governmentalities has meant that the settlements have not met the needs of those living in them. This has spawned much of the counter-conduct. The governmentality of the counter-conduct is traditional, socially based and informal in its nature. It is grounded in the need for survival through the maintenance of access to livelihood assets and is the same governmentality that was present in the original informal settlements.