The city provides a rich array of learning opportunities for young children. However, in many urban schools, often it can be logistically difficult to get young children out of the building. But when elementary children are encouraged to view the city as a classroom and use digital media to explore and represent their neighborhoods, they can be inspired by the unpredictable events of daily life to ask naive, critical and sometimes troubling questions. This paper presents a case study of a teacher in an informal media literacy learning environment who worked with a group of 9-year-olds in Philadelphia. It documents the experience of a novice teacher who, flummoxed by an accidental encounter between her students and a homeless person, transformed an uncomfortable experience into a teachable moment. Children’s questions about homelessness became the organizing frame for learning experience, as the instructor helped children make sense of the information on the Internet, analyze popular culture films and news media, and conduct interviews with community leaders and advocates for the homeless. The inquiry process resulted in a collaboratively produced multimedia project, created by children. The case study has implications for pre- and in-service teacher education for digital and media literacy. This paper suggests that improvization and strategic risk-taking must be conceptualized as a set of socio-emotional and experiential competencies that teachers need when using digital media in an urban community as a tool for learning.