Between 1952 and 2001, the number of urban settlements in Nepal grew from 10 to 58, while their share in the country's population increased from 2.6 to 14.4 per cent. However, the spatial distribution of urban growth was uneven. To find out how this unevenness was structured, a GIS-assisted analysis matched spatial reference data (such as distances between individual municipalities and major rivers, roads, international borders and major population centres) against several socioeconomic performance indexes, such as annual population growth, per capita income and expenditures of local municipalities, telephone ownership, number of primary schools and number of industrial plants. The fastest-growing urban localities were found to be close to major population centres, to highways and to the Indian border. The rest exhibited poor socioeconomic performance.