The pros and cons of the Compact City are intensively and inconclusively discussed in academia. Public institutions, however, often use the term “compact” in a more superficial way to promote sustainable urbanisation. Considering the complexity of urban spaces and the increasing presence of in-between conditions, there is a threat of compact urbanism being used as a one-sided and dichotomic paradigm: “if we build dense cities, we protect the countryside.” This paper compares institutional agendas with scientific findings in order to initiate a more holistic discourse between practitioners and scholars. Guidelines for sustainable urbanisation on different institutional scales (supra-national, national, megaregional, municipal) are analysed in terms of their definitions, assumed benefits, and considered trade-offs of urban compactness, as well as their conceptualisations of urban, rural, and peri-urban spaces. It is shown that incomplete and contradictory definitions of compactness point towards a missed potential regarding the narrow use of the Compact City in current urbanisation strategies. Furthermore, partly exaggerated claims for the benefits of urban compaction are used within a city-centric framework. While this is a rather generic conclusion, it stimulates new discussion between academia and practice. The final hypotheses of the paper are that practitioners, on the one hand, need to consider complex urban realities and pick up the caution expressed in research. Academics, on the other hand, need to acknowledge the desire for urban compaction and translate their findings into constructive and concrete recommendations.