The main objective of the study was to assess the physical impact-changes happened/made in the overall physical fabrics for the Katchi Abadi Improvement Programme that was implemented from 1985 to 1990. The main emphasis was to assess the changes in the layout of the settlements-katchi abadis, construction of houses, addition of rooms, and changes made in the covered area of the houses in the Punjab province. Seven hundred households from the katci abadis of three districts (Rawalpindi, Faisalabad and Multan) which are representatives of three geographical zones (Northern, Central and Southern) of the Punjab province were selected by using the systematic random sampling technique. The analysis of the data revealed that KIP has major positive impact on the above mentioned physical aspects. The average covered area before the implementation of KIP was 1.8 Marla and at the time of survey it was 2.8 Marla, about 76.5 percent households increased the covered area, about 63% made improvement in the construction, 57.6% perceived better about the security of tenure and 63.1 percent perceived better about the layout plan improved due to implementation of Katchi Abadi Improvement Programme (KIP). This all indicates the positive impact of KIP on the physical aspects of the of katchi abadis. The issue of squatter settlements/katchi abadis started getting attention of the government and other national and international agencies in 1960s. According to a UN report, in 1962 more than a billion people roughly half of the population of the developing countries was homeless. Their living conditions were described as ‘a menace to health and an affront to human dignity’ (Abrams, 1964).