Since the opening of the Museum of Old and New Art (Mona) in Tasmania, the museum's impact has been compared with the Bilbao Effect, a culture-led urban regeneration project. By exploring the museum's evolving relationship with an already strong cultural economy in Hobart, this thesis reconsiders and destabilises Mona's association to the iconic flagship regeneration model. After establishing how the policy-led Bilbao Effect model differs from the privately initiated 'Mona Effect', I then develop an account of how Mona became embedded and entangled in the cultural economy of Hobart. The annual Dark Mofo mid-winter festivals serve as primary case studies for examining the museum's impact. Through qualitative, ethnographic and place-based methods, this thesis examines how the mid-winter festivals translate the Mona brand from the museum, and inscribe Mona's ethos across the city during a fortnight of 'large-scale public art, food, music, film, light and noise' (Dark Mofo, 2013a: n.p.). Standard policy analysis in the field of culture-led urban regeneration has largely evaluated success through an economic paradigm, and been concerned with top-down policy interventions. Here, I interrogate the festival's explicit city activation agenda, and examine how the co-constitutive relationship between festival and city is enabled through the multiple actors who are active participants in supporting and facilitating the impact of Dark Mofo. Through an increasing interaction with the spatial and social landscape of the city, I demonstrate how Mona has become aligned with policy and governance. Finally, I explore the relationship between Mona and the Macquarie Point brownfield development, and the extent to which it veers towards the Bilbao model. In this thesis I contribute to existing literatures and knowledge by expanding methodological approaches for measuring impacts of urban cultural activity. I also promote a more nuanced approach to 'Effect' based research, informed by place specificity and ethnographic engagement. I argue that research methodologies which extend beyond econometric measures can account for cultural impacts, and furthermore, can promote the development of sustainable urban regeneration projects and cultural policy in the future. I find that while Mona does not align with the policy-transfer model of arts-led urban regeneration, the museum's evolving presence in the city and relationships with governance bodies has shifted towards a GLAMUR (Plaza, 2008) model of operating. However, I argue that Mona's embedded and place-specific engagement with the city presents an opportunity to re-imagine what a cultural economy in Hobart could look like into the future, beyond the limitations of the Bilbao Effect model.