This thesis concerns the differences in how ethinic groups co-exist in two different environments in the same country, with a focus on the ethno-political. My research questions are: Why are ethnic or interpersonal relations characterized differently in different regions? How and why do conflicts or agreements arise in specific environments? The aim is to understand the connection between inter-ethnic relations and environmentally specific factors. I am concerned with those mechanisms and processes which determine the type of ethnic relation – as conflict or mutual understanding - in specific environments. The thesis uses case studies of two contrasting multiethnic cities with different interethnic relations – Erbil and Kirkuk in Kurdistan/Iraq. My explanatory model consists of four main factors: I) historical factors in terms of critical events; II) institutional factors such as institutional efficiency and security; III) structural factors such as group size, territorial base and different tolerance systems; and IV) social relational factors such as the significance of inter-ethnic contacts and social capital. The empirical work demonstrates that the relations between the above mentioned factors in the respective environments determine the outcome of the inter-ethnic relations. The results show that one factor can be more important than another factor, but how the factors impact upon one another and under what circumstances is of significance. The presentation of environmentally specific differences shows that ethnic groups do not have static boundaries and are not necessarily hostile to one another. Conflict is not the given form of relationship between ethnic groups. That is, the result can be read as a critique of those who necessarily see potential conflicts between groups with cultural differences and those who essentialize cultural groups. In this context one can see a chain of interrelated factors; the relevance of which is dependent on the specific situation. Some of the negative factors that can increase the possibility of conflict and decrease the possibility for peaceful co-existence include: Instability in the political climate; insecurity; institutional ineffectiveness; segregation; undefined relations of power; and an ethnic composition maintaining the balance of power. If these factors combined result in a high level of complexity, which makes ethnicity stand out in terms of ethnic competition, the likelihood of ethnic conflict is significant.