In this paper, we discuss how transdisciplinary development research (TDR), if approached in particular ways, can produce new knowledge and also foster deeper systemic changes in the knowledge system itself. We are concerned with systemic change that supports propoor sustainability transformations, and conceptualize the processes that contribute to this type of systemic change as “transformative space making” (TSM). Transdisciplinary development research as TSM can generate possibilities for the integration of diverse knowledges into decision making, while also creating new opportunities for subaltern knowledges to achieve greater influence, through enhancing the transformative agency of the poor. Thus, our conceptualization goes beyond the idea of TDR for the cocreation of solution-oriented knowledge and recognizes the need to address structural injustices in knowledge systems. In TDR as TSM, the development of strategies to reveal power relations and navigate the politics of structural injustices becomes as important as refining the principles for robust collaborative knowledge production. To demonstrate the operationalization of TDR as TSM, we draw insights from our long-term involvement in TDR case studies of emergent environmental and health challenges in periurban contexts in India. We identify mechanisms that build legitimacy of propoor knowledges, while simultaneously creating “readiness” to take advantage of opportunities for interventions to support change in policy and practice at multiple scales. We highlight the politics of alliance building both within and beyond the research team, arguing that attention to alliances is central to understanding the role of TDR in creating possibilities for transformative change. Finally, we argue that development research funding and commissioning agencies should pay attention to the mechanisms of TSM, alongside more recognized aspects of the planning, monitoring, and evaluation of TDR initiatives, in order to provide appropriate support for enhanced impact.