Birmingham, Bristol, Cardiff, Liverpool, Newcastle/Gateshead and Oxford were unveiled as the contenders by Culture Secretary Tessa Jowell.
The six were whittled down from an original list of a dozen by a 12-person committee which visited the competing cities to draw up the shortlist.
Ms Jowell said the competition had "brought out the very best" in the 12 cities which had entered.
"All the bidding cities recognised the power of culture and creativity as an engine for regeneration, and a rich seam for boosting civic pride and firing imaginations.
"So now we have six centres of excellence; six showcases for the very best that Britain, the most creative country in Europe, has to offer."
The cities which failed to make the shortlist were Belfast, Bradford, Brighton and Hove, Canterbury and East Kent, Inverness and the Highlands and Norwich.
The committee will now revisit the six shortlisted cities before making its final recommendation to the Department of Culture.
Fierce rivalry
A recent poll showed that Birmingham had the greatest backing among the public, with Cardiff close behind and the joint Newcastle and Gateshead bid in third.
The rivalry between the cities has been fierce, owing to the benefits previous holders of the title have received.
The UK's last City of Culture - Glasgow in 1990 - saw a massive increase in tourism as a result of winning the title.
"
Give Brum a chance
"
Ricky Wright, UK
The shortlisted cities are automatically given the title of Centres of Culture, which can help them secure European and lottery funding.
Tourism boost
The eventual winner will be announced by the prime minister in the spring of next year.
The European Union (EU) has designed the Capital of Culture programme to replace the City of Culture status which began with Athens in 1985.
The first "Capital" will be Cork in the Republic of Ireland in 2005, followed by Patras in Greece in 2006 and Luxembourg a year later.