In the context of economic globalisation, there has been considerable academic interest in understanding the choice of location of foreign direct investment (FDI) firms. Generally, studies on the location of FDI firms focus on national and regional levels. There are only a limited number of studies at the intra-urban level, especially for developing countries. This paper investigates where the industrial and service FDI firms are distributed within Istanbul, and how location-specific factors affect their decisions. This study is based on a sample of 100 companies surveyed in Istanbul at the end of 2002. The locational determinants of FDI firms in Istanbul have been analysed using factor analysis and logistic regression techniques. It was found that location-specific advantages influence the location of service and industrial FDI firms (between the central and suburban districts) in the Istanbul metropolitan area. The service and industrial FDI firms in Istanbul also chose different locations. © 2008 by the Royal Dutch Geographical Society KNAG.