We investigate agglomeration economies that affect performance of firms in the Russian cities. Our sample includes firms belonging to manufacturing industries. Performance is measured by the growth rate of enterprise revenue during 2001-2004. Differences between 5 specially defined classes of industries are analyzed, as well as specific features of agglomeration effects for the new and old generations of enterprises. We find significant inverted U-shaped localization economies and positive economies from industrial diversity in a city. It is shown that localization economies potential in Russia is not fully utilized.