This paper analyzes the dynamics of population growth and urban expansion in the city of Xalapa, Mexico. It focuses on the establishment of informal settlements, which are one of the many threats to forest and farmland conservation (although these settlements are not the only source of the problem). Spatial analysis of growth data (using Geographical Information Systems (GIS) and statistical modelling) showed that by 2007, 90 per cent of the land area in the municipality of Xalapa had already been altered by human activity. Furthermore, informal settlements occupied around 54 per cent of the urban area. The cover of cloud forest, the region’s original ecosystem that is of immense ecological importance and biological wealth, was calculated at only 7.6 per cent (9.3 square kilometres) and this is being threatened by the continued expansion of informal settlements. It appears that, at the time when these informal settlements are being established, a certain environmental logic operates, which in turn makes possible the social logic that sets off the occupation of spaces that are, in principle, not suitable for urbanization. The inadequate income of much of the population and their need for housing, as well as the absence of genuine long-term urban planning and, most importantly, the lack of legally available contiguous land for building, are encouraging the occupation of land not suitable for urban development, including sites at high risk of landslides and flooding. This is also causing natural resource and farmland degradation as well as the deterioration of living conditions within the urban boundary, problems that threaten the city’s sustainability.