One major feature of the rapid growth of urban centres in most parts of the developing world in recent years is the evolution of residential districts whose socio-economic characteristics are distinct from one another. This article analyses the social characteristics of contemporary residential districts in one Nigerian city, Benin, and attempts to identify the major factors responsible for the present spatial structure of residential districts in the town. The study suggests that social, cultural and institutional factors have been the main influence in the development of the present residential pattern, which cannot be explained solely by the theories which have been advanced for Western industrial cities.