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Many cities are located on rivers or coasts. This paper argues that such cities de-veloped as transportation hubs or markets for interregional trade, since these locations provide better access (lower marginal transportation costs) to other regions. Local products are collected at such hubs, and interregional trade then takes place among these transportation hubs. As the volume of trade between hubs increases, more work-ers are needed in order to meet labor demand for shipping and handling commodities, resulting in population agglomeration at such hubs. This paper constructs a simple three location-identical consumer model, in which transportation hub and population agglomeration emerge endogenously. In contrast with much of the literature on city formation, we introduce no economies of scale into the model. Markets are assumed to be perfectly competitive and complete. Since prices are determined in equilibrium, JEL Classi*cation Number: , ,.: hub city, spatial general equilibrium, labor demand in transportation sector, no scale economies, perfect competition This is a complete version of-Formation of Hub Cities: Transportation Cost Advantage and Population Agglomeration0 (forthcoming in). This paper used to be entitles-Hub Cities: City Formation Without Economies of Scale,0 and various version of it have been presented and circulated since 1996. Many friends, colleagues and seminar/conference participants have provided valuable comments on the idea expressed in this paper. Especially, I would like to thank Andrew Austin, Nathan Balke