There is growing European policy interest in the potential of small and medium-sized towns (SMSTs) to contribute to more balanced territorial development. National policy in Denmark has only recently begun to address SMSTs directly. Often, the development of SMSTs is reduced to either being part of larger urban regions or, in the case of rural areas, hidden behind broader regional development agendas. A key research question is therefore which development paths can be detected beyond the growth–decline dichotomy. Against this backdrop, the ESPON TOWN DENMARK project (2022) juxtaposed general trends of growth and decline in population and employment in Danish SMSTs with other aspects such as demography, education, industry, service provision and regional position. We develop and apply an analytical typology adding more nuances to SMST pathways within and outside metropolitan areas.