The modified law of Iranian Administrative divisions has greatly altered the pattern of settlement in recent decades. The promotion of rural areas to urban areas has shifted from mere population standard to combined population-administrative standards. However, all censuses suggest that many rural areas reported as smaller than the minimum population standard have been promoted to urban areas. In the last two decades, this is a clearly prominent phenomenon in the urban system of Iran. This paper evaluates the effects and consequences of promoting small and sparsely populated rural areas to urban areas in the Bushehr province. The used methodology is analytic-descriptive using a questionnaire distributed among 380 members of the target population. Data analysis is conducted in physical, economic, social and urban servicing domains using one-sample T-test and the utility range. The results show that promotion of rural areas to urban areas has positive outcomes such as improved waste disposal system, improved quality of residential buildings, increased monitoring of the construction, increased income, prevented migration and improved health services. However, the results of utility range show that the negative consequences of this policy are more than its positive outcomes, which have been studied in detail.