The rate of urbanization in Laos has increased significantly since the country began its transition to a market economy in 1986. Although urbanization in developing countries has been examined extensively in the literature, very few researchers have focused on Laos. Our main aim here was to examine the effectiveness of utilizing the master plan as a management tool to regulate urban growth in Vientiane, the capital city of Laos. We used a mixed-methods approach to address the research objective. First, we examined the population changes since 1985. Next, land-use and land-cover changes were detected by analyzing the satellite images from three different time periods. Then, we analyzed the city's recently approved master plan to determine whether it can regulate urban growth. Finally, to investigate the socio-economic and institutional issues and better understand the reasons for rapid land-use and land-cover changes, we interviewed several key figures from the departments related to urban management and a number of residents living in the peri-urban area. Between 1995 and 2011, the urban population in the study area increased from 337,000 to 780,000. In the same time period, the built-up area increased from approximately 154 km2 to more than 206 km2. The total area of the forests decreased from approximately 2354 km2 to approximately 1353 km2. The results indicate that there is an urgent need for improvements in the regulatory and management aspects and that the master plan should be revised to provide a more realistic account of the existing situation.