This study examines Slum “555,” a peri-urban informal settlement on the fringes of Yangon, Myanmar, to investigate how informality emerges, persists, and functions under conditions of institutional exclusion, regulatory neglect, and spatial marginalization. Drawing on historical review, spatial analysis, and fieldwork conducted in 2018–2020—including interviews, field observations, community mapping, and a small-scale household survey (n = 36)—the paper traces the settlement's formation as a governance outcome shaped by state-led resettlement policies since the late 1980s, disaster-induced migration, and weak regulatory enforcement. Situating Slum “555” within Yangon-wide patterns of informal settlement location and land-use context, the analysis shows that the settlement is not an exceptional case but part of a structurally produced peri-urban geography of informality. The study further documents how, in the absence of sustained formal support, residents have developed locally legitimate governance mechanisms—such as fire prevention networks, informal flood response arrangements, and mutual-aid practices—to manage both everyday risks and disaster-related crises. These practices indicate that informality should be understood not simply as a deviation from planned urbanism, but as an adaptive mode of micro-governance operating within the limits of formal systems. The findings contribute to debates on informality, disaster risk governance, and inclusive urban futures in the Global South, and are particularly salient given Myanmar's post-2021 constraints on institutional capacity and the 2025 earthquake. Building on the empirical evidence, the paper argues for policy approaches that connect informal governance to formal planning through non-punitive institutional interfaces and incremental, risk-informed in-situ upgrading, rather than eviction-led or exclusionary interventions. • Analyzes peri-urban informality through the case of Slum “555” in Yangon. • Shows how resettlement legacies and industrial growth reproduce informality. • Reveals a critical asymmetry in self-provisioned infrastructure. • Identifies vernacular governance as primary infrastructure under uncertainty. • Advocates risk-informed, in-situ upgrading through formalized interfaces.