During the first decade after the Islamic Revolution of Iran, Plan and Budget Organization (PBO) embarked upon a series of studies titled "Regional Disparities Investigation" . They aimed at demarcating the country's regions based on indicators of social- economic- natural and infrastructure facilities. The results of these studies were instrumental in order for PBO to formulate national strategies of social equity. Attributed to it's prevailing rural economy, natural setting and diseconomies of spatial structure, Ghezel-Ozan watershed was identified as one of the most deprived regions of the country. The next step was taken by the Ministry of Construction Crusade which launched an investigation and planning project at the Ghezel-Ozan regional scale in 1993. The goal of this project was to explore underlying causes of the region's relative backwardness and to formulate policies and plans to alleviate the situation. Taking an environmental approach to regional development, this article attempts to elucidate relationships of determining resources such as water, soil, flora etc. to settlement patterns in the watershed. The main conclusions based on the findings of the project were : a) Unequal and sparsely scattered distribution of natural resources has been historically, the main determinant of appearance of thousands small villages, one forth of which is now deserted. b) Due to lack of sizable urban centers in the watershed which could assume roll of central places on the one hand, and unfavorable climate and terrain resulting in weak communication networks on the other, in addition of many deserted villages the remaining are greatly dependent upon services of outside urban centers. C) parallel to certain natural processes, economic activities such as traditional animal husbandry and agriculture are responsible for escalating resources deterioration. All in all, due to lack of planning commitments, the watershed has missed development opportunities embedded in it's both man made and natural settings.