Housing policy in Zambia has followed a similar sequence to other developing countries, from construction of public housing to sites and services to upgrading of unauthorised areas, and earlier policies reveal outcomes and problems similar to those in other national contexts. A partly World Bank funded squatter upgrading and sites and services project was implemented in Lusaka between 1974 and 1981. In view of the innovative nature of this proJect, systematiC evaluation of its outcome and impact was carried out. Evaluation of the effects of upgrading in one of the main upgraded squatter areas, Chawama, is reported here. Upgrading resulted in improvements to the living conditions of residents and many of the principles upon which the design and implementation of the project were based were found to be sound. However, a number of problems were experienced, with respect to standards adopted for and maintenance of physical infrastructure, cost recovery and affordability, which were not unique to the Lusaka project. Evidence was found in the upgraded area of continued house improvement, growth in the total population of the area during upgrading and an enlarged small-scale rental housing market. Many residents affected by installation of infrastructure bad found accommodation elsewhere, especially small and tenant householdsj resettlement of the rest was accomplished in an adjacent overspill area without conflict, and rapid house consolidation ensued. Despite the absence of overt discrimination against particular types of household, the overspill area was characterised by households of larger than average size and higher than average income, suggesting a process of differentiation within Chawama itself. There was no evidence of upgrading having created opportunities for the valorization of landed capital, for penetration of the housing markets of unauthorised areas by external large scale capital, nor of displacement of existing with higher income residents. The roles of the state in housing policy and proclaimed reliance on self-help as a housing strategy for low income urban residents were found to be ambiguous in both theoretical and practical terms.