Internal migration affects developing economies by 1) easing population pressure on the land, 2) aiding urbanization, and 3) decentralizing industry and manpower. This paper examines internal migration in Malaysia, explains migration decisions, and focuses on migration policy interrelationships. Data come from the 1970 Population and Housing Census, which recorded approximately 1 million lifetime migrants. In 1970, rural to urban migration (39%) dominated internal migration; however, because of the Malaysian government's attempts to develop new agricultural land, urban to rural migration is also fairly high (15.3%). The manufacturing sector has shown impressive growth (12.5% per year during the 1970s) largely due to an active import substitution program. Industrialization absorbs rural labor into modern productive employment, but unless it can generate enough jobs, migrants will move from rural to urban areas only to remain underemployed or unemployed. In Malaysia, the manufacturing sector has failed to provide enough jobs due to 1) manufacturing's small base, and 2) its capital intensive nature. Unless the government applies rigid controls, internal migration patterns will increase regional growth differentials, thwarting balanced national development. The authors use a spatial interaction model to explain the interrelationships between internal migration and socioeconomic variables. They find that 1) per capita gross domestic product is significantly negative at the origin and positive at the destination, demonstrating that income differentials contribute to interstate migration, 2) the distance variable is significantly negative, showing that the farther 2 states are apart, the lower the migration rate, 3) evidence suggests that educational attainment at the destination state negatively affects migration, and positively affects migration at the origin state, 4) land schemes have little effect on migration, and 5) manufacturing, and 6) agriculture are also insignificant variables. The authors recommed inprovement of the infrastructure in less developed states and smaller urban towns to encourage long distance migration, and more educational opportunities and crop diversification.