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Very high resolution synthetic aperture radar (SAR) sensors represent an alternative to aerial photography for delineating floods in built-up environments where flood risk is highest. However, even with currently available SAR image resolutions of 3 m and higher, signal returns from man-made structures hamper the accurate mapping of flooded areas. Enhanced image processing algorithms and a better exploitation of image archives are required to facilitate the use of microwave remote-sensing data for monitoring flood dynamics in urban areas. In this paper, a hybrid methodology combining backscatter thresholding, region growing, and change detection (CD) is introduced as an approach enabling the automated, objective, and reliable flood extent extraction from very high resolution urban SAR images. The method is based on the calibration of a statistical distribution of “open water” backscatter values from images of floods. Images acquired during dry conditions enable the identification of areas that are not “visible” to the sensor (i.e., regions affected by “shadow”) and that systematically behave as specular reflectors (e.g., smooth tarmac, permanent water bodies). CD with respect to a reference image thereby reduces overdetection of inundated areas. A case study of the July 2007 Severn River flood (UK) observed by airborne photography and the very high resolution SAR sensor on board TerraSAR-X highlights advantages and limitations of the method. Even though the proposed fully automated SAR-based flood-mapping technique overcomes some limitations of previous methods, further technological and methodological improvements are necessary for SAR-based flood detection in urban areas to match the mapping capability of high-quality aerial photography.