Abstract Background Malaysia has the highest rate of overweight and obesity among Asian countries. Obesity is increasing particularly among low-income populations. This study aimed to assess dietary practices among low-income adults in urban communities, including gender and ethnic variation, to inform the development of locally tailored, evidence-based interventions for health promotion. Methods This cross-sectional study was conducted from August to December 2020. Stratified sampling was employed to recruit 2983 low-income adults from households in the bottom 40% of the economic spectrum (B40) at six public, low-cost housing flats in the Federal Territory of Kuala Lumpur, Malaysia. Face-to-face interviews were conducted using a structured questionnaire to understand dietary practices, perceptions of healthy food availability and affordability, and factors affecting food purchasing decisions. Results A staggering 89.5% of B40 adults were found to not consume adequate daily amounts of fruits and vegetables. In addition, 68.1% reported consuming sugar-sweetened beverages at least once per week, including commercially packed ready-to-drink beverages, sugar-added self-prepared drinks, and premixed drinks. Intake was statistically significantly higher among men (71.7%), Malays (70.3%), and Indians (69.9%). Bread and other commercially baked goods were the most common processed foods, and 52.9% of respondents consumed it at least once per week. Majorities reported that healthy foods were moderately available and priced. The top three reported factors affecting food purchase choices were price (79.4%), availability (75%), and taste (73%). Conclusions Adults in low-cost housing communities have unhealthy dietary patterns with low intake of fruits and vegetables and high intake of ultra-processed foods and calorie-dense local foods, with variations across gender and ethnicity. The study highlighted the need for educating low-income families on diet-disease relationships and possibilities for inexpensive, healthy eating that rely on minimally processed fresh foods. Policymakers engaging the food industry are advised to consider how to increase the affordability and availability of healthy foods in low-income communities in urban areas.