This chapter examines the ‘market experiment’ unfolding in Tallinn, the capital city of Estonia, by focusing on how this experiment is beginning to reshape levels and patterns of socio-economic segregation as measured by occupation. The analysis contributes to discussion of the ‘paradox of post-socialist segregation’ i.e., the observed decrease in levels of segregation in tandem with an increase in social inequality as market forces are introduced into the Eastern European city. Together with the two other Baltic States of Latvia and Lithuania, the Estonian case is interesting for two reasons. First, the Baltic States are unique due to their radical institutional transition from a state-controlled socialist system to one of the most liberal market-oriented systems in Eastern Europe. This is the ‘market experiment’ unfolding in Tallinn. Second, a large Russian-speaking minority has a residential pattern determined largely by the new housing construction and central housing allocation regime in place during the Soviet period (1944-1991). Thus, unlike cities with ongoing high immigration elsewhere in Europe, Tallinn allows insights into what happens with long-established minorities when no significant new immigration is taking place and markets determine residential sorting. Our main finding is a considerable increase in occupational residential segregation as socio-economic inequalities become manifested in urban space, with increasing overlap between socio-economic and ethnic segregation.