The paper summarizes the main findings of a study on small towns in peripheral locations in Germany. In its first part, the results of the data analysis are presented and the spatial distribution of shrinking and growing small towns in Germany is described. The majority of them in peripheral areas are currently shrinking, which includes an assemblage of demographic, economic, infrastructural and fiscal problems, leading to a danger of a negative downward spiral. The second part deals with specific challenges and problems of the shrinking towns. In qualitative case studies, main disadvantages of peripheral location and peripheralisation processes of four selected towns are outlined, which narrow the scope of action for local politics. Part 3 provides a short analysis of the main strategies of those four towns coping with peripheralisation. In the last part, an outlook is given in a more general matter, which shows possibilities to turn the ascribed deficits of peripherality into strengths.