Planned and involuntary resettlement after natural disasters has been a major policy in post-disaster reconstruction in developing countries over the past few decades. Studies show that resettlement can result in significant adverse impacts on the resettled population. Conversely, a well-planned and managed resettlement process can produce positive long-term development outcomes. This article presents the results of a case study undertaken 11 years after the 1990 Manjil earthquake in Iran. During the reconstruction period, a policy of involuntary planned resettlement was pursued extensively. The socioeconomic changes that occurred as a consequence of this policy of involuntary resettlement are analysed. Data were collected via a questionnaire survey that involved a sample of 194 relocated households (grouped into a settlement that later became a town). The paper shows that relocated families face difficult socioeconomic challenges after relocation and regrouping. This is especially true with respect to employment, income, the empowerment of women and lifestyle issues.