The Finnish Oy Mets„-Botnia Ab began in September 2005 the construction of a pulp mill in Fray Bentos, a town with 23 000 inhabitants in Western Uruguay. The Botnia pulp mill project, more known for the diplomatic crisis between Argentina and Uruguay over the environmental impact of the investment, is in this investigation analyzed for its repercussions on internal migration and a perceived risk of irregular settlements in Fray Bentos. The investigation, a master''s thesis, is a background study for an intervention to manage internal migration planned by agencies forming part of the United Nations Country Team for Uruguay, and the local authority counterpart in the Rio Negro-Fray Bentos region in the year 2007. The results suggest, that there is no need for the planned intervention. The Botnia pulp mill project is not likely to lead to permanent internal migration, which would significantly exceed the actual demand for labour. The analysis suggests, that the role of internal migration in the formation of irregular settlements in Uruguay might well be smaller than often assumed.