Arturo Soria’s Ciudad Lineal (Linear City), conceived in 1882, stands as an early experiment in transit-oriented urban planning. Envisioned as a linear settlement integrating housing, nature, and infrastructure along a rail corridor, it aimed to reconcile urban growth with hygienic, low-density living and cross-class social integration. Materialized in Madrid through the Compañía Madrileña de Urbanización (CMU) from 1894, the project developed as a private initiative combining real estate development and urban services. Though limited in scale, Ciudad Lineal prefigured key ideas in later suburban and Garden City models. Over time, however, Soria’s utopian vision was overtaken by shifting political and economic realities. Interrupted by war and postwar stagnation, the area underwent major transformation in the 1960s–1970s amid Madrid’s rapid expansion and motorization. The tram line was removed, automobile infrastructure prioritized, and middle-class residential blocks replaced the original low-density model. These changes entrenched socio-spatial polarization, reflecting broader dynamics of suburbanization and state-supported private development. This article reinterprets the evolution of Ciudad Lineal through a political economy lens, examining how capital, infrastructure, and ideology have shaped its built form and social composition. Using a multidisciplinary methodology that combines urban theory, historical analysis, and socio-economic data, the article traces the transformation of Ciudad Lineal from a pioneering transit-oriented suburb into a car-centric, socially polarizing urban artery in Madrid. Ultimately, the case of Arturo Soria reveals the contradictions embedded in infrastructural urbanism: how ideals of sustainable, inclusive development are often reshaped—and undermined—by speculative pressures and state–market alliances, with lasting spatial and social consequences.