We argue in this paper that the notion of informality captures something essential about social interactions in modern societies that has been neglected in much of Western social science.  Acknowledging that the term "informal" has been used in ill-defined and conflicting ways, we strive to provide in the first part of the paper a conceptualization of informality as a property of social interactions and the larger social context in which the transactions are embedded.  Whereas formal transactions are governed by legally and bureaucratically generated rules, informal transactions, as we conceive them, are subject to socially-generated and enforced rules and norms.  In the second part of the paper, we focus on one of the most important settings in which informality is manifested: the social network.  In defining social networks, we contrast them to the set of latent ties that link individuals with a common identity or a shared experience, on the one hand, and to organized groups and formal organizations, on the other.  We conclude by arguing that social networks are the arenas in which informal rules, norms, and obligations are formed, sustained, and occasionally altered.