In urban upgrading projects, although many experiences shows efforts in the application of participatory planning concept, yet, the definition of participative parties (stakeholders) and their roles in the project does not take the enough attention. The present research adopts the following statement: "definition of stakeholders and their roles in urban upgrading projects must be achieved accurately in the first stage of the project, and the process must take into account potentials and skills of each stakeholder. The research aims at soliciting indicators and principles which can help in the definition of participative parties in urban upgrading projects. The research is consisted of three main parts. In the first part, a theoretical review of stakeholders and their potentials and skills is made. The second part includes an analytical study of many participatory upgrading projects in Egypt. The third part contains solicited indicators and principles which can help in designing a more realistic and reliable methodology for participatory planning in urban upgrading projects.