This article focuses on the political conflict between Osaka City Government and Osaka Prefectural Government regarding the issue of expanding autonomy in postwar Japan. After WW2, Osaka City started the movement for Tokubetsu-Shisei, whose aim was to give large cities‘ prefecture-level’ authority. Osaka Prefectural Government opposed the movement and favored another system, named Tosei, of which the aim was to merge the prefectural government with the city government. Neither plan was realized, however, because they were not compatible with the intentions of GHQ/SCAP. While some previous research has tended to approach this issue from the perspective of public administration or fiscal policy, others have studied it as part of the ‘democratization’ policies of the American occupation forces. In contrast, this study aims to explain this issue as a conflict of ideas on urban governance between Osaka City and Osaka Prefecture. In doing so, it is shown that the pressures of growing urbanization accompanied by social diversification since the interwar period made the traditional way of organizing local governance in early postwar Japan untenable. The conflict between Osaka City and Osaka Prefecture emerged to deal with these new circumstances.