Regional and urban policies always have consequences for the whole of the national territory, whether or not they were intended to do so. Thus policy makers should have a reasonably good grasp of the structure of human settlement systems and of the nature of the processes that underlie evolving settlement patterns. A number of traditional approaches to urban systems are critically evaluated, and more recent contributions with respect to hierarchical diffusion models and the relationship between business organization and spatial organization are examined. Then recent changes in actual human settlements patterns in developed countries are discussed in some detail. It is argued that although various theories have provided partial insights into these processes, none has proven adequate. The concluding section outlines an analytic framework for improving policy-related research on settlement system development processes.