With the overthrow of the Derg in 1991, some 500,000 ex-soldiers needed to be demobilized and reintegrated back into their communities. Success- fully integrating such a large number of ex-soldiers is clearly important to social stability. While carefully targeted ssistance is necessary, conditions in the rural and urban economies at the time of demobilization are also critical to ex-soldiers and the reconstruction of their livelihoods. This paper therefore pays close at- tention to land tenure and to the urban labour market, and their implications for reintegrating ex-soldiers back into the community. Data from four recent house- hold surveys are used for this purpose. On the basis of the data analysis, the paper concludes that the demobilization and reintegration programmes achieved some success. Ex-soldiers returning to their rural communities did not, by and large, face major problems in gaining access to land. State ownership of land facilitated the reintegration process. However, lack of a land market does pose problems, and tensions over land may increase. Ex-soldiers have below average holdings of livestock (a key asset for rural livelihoods) re ecting diffculties in livestock provision in the reintegration programme. Moreover, ex-soldiers who entered the urban economy encountered a tough labour market and many became unemployed. In summary, young people have few livelihood opportunities in either rural or urban Ethiopia, a situation that must be remedied if social conflict is to be avoided and poverty reduced.