The main objective of the study was to assess the socio-cultural impact of the Katchi Abadi Improvement Programme (KIP) that was implemented from 1985 to 1990 on the dwellers-squatters in the Punjab. Seven hundred households from the katchi abadis of three districts (Rawalpindi, Faisalabad and Multan) which are representatives of three geographical zones (Northern, central and Southern) of the Punjab were selected by using the systematic random sampling technique. The analysis of the data revealed that KIP has impact on the household’s size, number of households living in the structure, type of family, status and type of occupancy, community conflicts, visits of the relatives and friends, choices of children marriages and movement of the women, children and venders. The average household size at the time of survey was 8.17 as compared to 11 in 1985. The community conflicts were reduced greatly after the implementation of KIP. The movement of the women, children and venders increased after the improvement undertaken through the implementation of KIP. The frequency of the visit of the relatives was increased after the improvement made by the implementation of KIP and a major change in the type of family from Joint to Nuclear was also observed. This all indicate the positive impact of KIP on the socio-cultural aspects of the dwellers of katchi abadis- squatters. It can be inferred that KIP was relatively successful; however, it can be further improved. Shelter is one of the basic needs of human beings. Public planning and development agencies in Pakistan like other developing countries have also launched housing programmes to overcome the problem of shortage, particularly for low-income people. However, the process has been extremely slow and inappropriate to meet the demand. Resultantly, the low-income people have continued building katcha- rudimentary houses of cheap makeshift materials affordable to them. This phenomenon took the shape of mushroom growth of squatter settlements on public or private land lying vacant adjacent to the existing villages in rural areas and in major urban centers. These squatter settlements are called katchi abadis (dissolvable settlements) in Pakistan.