Although urban renewal plays a positive role in improving slum areas and provision of social amenities, little is known about how the process of resettlement of slum dwellers affects the households involved. This is especially the case of cities like Addis Ababa which, in recent years, saw relocation of slum residents into its outskirts on a massive scale. This thesis explores the socio-economic impacts of resettlement in selected sites in Addis Ababa. It examines the perspectives of relocated households about the process of slum upgrading, on being moved to periphery, and their coping and livelihood strategies. Fieldwork was conducted for three months, beginning from mid-June up to the end of September 2009. The methods of data collection include observation, in-depth interviews, group interviews, focus-group discussions, household visits and field notes. These methods were used so as to gather data from forty-nine relocated households and six key informants working in the city administration. Qualitative data triangulation was used to increase the validity of the empirical material. It is argued that although residential relocation has enabled many slum residents to have access to better housing conditions, it has negatively affected their socio-economic well-being. This is manifested in many ways. First, relocation has resulted in the loss of household’s ‘locational advantage’. Since the income generation possibilities for many of the urban poor are found within city center, relocation to the outskirts meant that they have to travel long distances daily, which incurred them transportation cost and time. Second, it led to an increased financial pressure to reach to workplace, market centers, school and healthcare facilities. Most importantly, relocation has disrupted many home-based, small-scale income-generating businesses, especially those which were performed by women. Thirdly, residential relocation created a loss of community relationship and neighborhood support that revolve around community-based social (e.g. burial and church-based) as well as economic (e.g. saving) organizations. Yet, the impact of urban resettlement has variable outcome for the relocated households. This is observed in terms of differences in the quality of housing, amount of compensation received, access to infrastructures and social services, power relation with authorities and community participation in decision-making process. The thesis concludes that urban redevelopment and resettlement policies must be consistent, well-designed as well as well-implemented in partnership with the inhabitants involved. They need to be formulated to address not only the tenure status of slum dwellers but also to preserve their social networks support. This requires the city administration to work closely with NGOs and the private sectors in meeting the needs of the displaced households and local communities by providing more open space for their meaningful participation.