From the 1990s to date, growing deterioration of urban environmental quality, and the developments of squatter settlements and squalors have gradually become the attributes of the development patterns in the Federal Capital City (FCC), Abuja and environs in Nigeria. The FCC, Abuja and the surrounding towns and settlements popularly referred to as ‘satellite towns’ in Nigeria, are characterized by inadequate urban infrastructure, high rural-urban migration, population pressure, high cost of living, poor economic lifestyle, informal settlements and failing infrastructure. In view of these urban development dynamics and the prevailing economic situations in Nigeria, many citizens have resorted to building and settling in unapproved lands within and around the city. In attempts to maintain the designed land use and master plan of the city and to control the quality of infrastructural developments in the area, the relevant government authorities often employ the use of mass demolition of illegal constructions, and informal settlements; resulting in displacement of many inhabitants. A further repercussion of this process is the emergence of several unplanned settlements dotting the surroundings of the city area assumed to be outside the immediate development interest of the FCC authorities. This paper is therefore aimed at assessing the urbanization of the FCC, Abuja as a catalyst for the emergence of squatter settlements and squalors in and around the city. To achieve this, Landsat satellite images of Abuja in 1987, 2001 and 2006 were used in mapping and analyzing the spatial growth of the city. The results of the study showed that squatter settlements and squalors have sprang up in and around the study area due to poor housing scheme, which made proper accommodation within the city unaffordable for low income residents of the city who were mostly civil servants. It was argued in the paper that, though demolition exercise may be agreed by the Abuja City Administration as a necessity, this could be largely avoided if proper housing infrastructure is included in the planning process.