Technological innovations, sinking transportation costs and changing general political and economic conditions have fostered major changes in the structural and spatial development of Swiss land use patterns. The ongoing conversion of agricultural land to residential and commercial uses is driving urban sprawl not only into suburban areas but also into rural areas. Despite a well-established land use planning policy, the present instruments, based on a command-and-control policy, have only been partially successful in preventing urban sprawl and containing land consumption. Based on this premise, the use of market-oriented instruments in land use planning could be a viable addition or even alternative to traditional instruments. This paper presents the concept of Transferable Development Rights (TDR), analyzes international case studies and discusses the application and acceptance of the concept in the Swiss planning context. In theory, transferable development rights seem to be a powerful instrument for preventing urban sprawl. However, the analysis of different case studies reveals that implementation in practice is complex and only works under specific conditions.