The Saharan city of Laâyoune, located on the Atlantic coast, was founded in 1938 under Spanish colonialism as a small military post, eventually becoming Spanish Sahara’s administrative and political centre. It grew massively following development of the phosphate industry at Boucraa in the 1940s and Morocco’s annexation of Western Sahara territory in 1975, after Spain’s withdrawal. Its demographics have gradually shifted, with many non-Sahrawi Moroccans moving to the region to benefit from expanding commerce and government resettlement incentives. Among Laâyoune’s total population of over 220 thousand, Moroccan settlers outnumber Indigenous Sahrawis, who have shifted from pastoralism to urban residence. Sahrawi activists also maintain a support base for the Polisario Front and the Saharan Arab Democratic Republic’s Algerian-based government-in-exile. The chapter traces Laâyoune’s Spanish colonial history and post-1975 Moroccan administration in the context of the unresolved Western Sahara territorial dispute, and it considers how policies of urbanism and sedentarization have transformed Laâyoune into a modern desert city. Nevertheless, ethnic and political tensions surrounding the Western Sahara conflict continue to challenge the Moroccan state’s narrative of cohesive integration and development.