The Methodology for Identification of Local Challenges in Urban Settings is a guide for the step-by-step exploration and identification of local challenges and needs faced by communities in urban environments due to social issues. It is based on participatory social research approaches and includes the research experience of the ENACTING project. It includes the research tools developed in the framework of the project (Desktop Research Template, Qualitative Research Questionnaire) and suggests the most effective ways of using these tools. This methodology focuses on social research in order to produce material for social documentaries. Although it follows the basic principles of participatory social research and could be used for other purposes, its main focus is on linking the social with the creative process of producing an artistic product – the documentary.