An urban development project involving residential and school buildings as an extension of Madras city is described. The analysis of the project is made using the systems approach as a problem of human settlements. The methods adopted fiber efficient utilization of apace at optimal cost by functional planning, use of prefabricated units, and use of new constructional, procedures is described. The interrelationship between environmental, technical, social, cultural, psychological, economic, financial, and management factors in making decisions for the project is discussed.