Many developing countries have used resettlement as a rural development tool. People have been encouraged to move from one area to another mostly to enable them to access adequate land for subsistence requirements and a viable livelihood. Malawi used resettlement as a rural development tool in the late 1960s and 1970s. In a situation of resettlement there is potential conflict between the host population and incoming groups. In 2005, some landless people from Mulanje and Thyolo Districts had been resettled in Machinga District as part of the Community Based Rural Land Development Project popularly known as Kudzigulira Malo. The main objective of this study was to establish the influence that host-settler relations had on settlers‟ livelihoods. This study was carried out in the areas of Traditional Authorities Liwonde and Chiwalo in Machinga District, where some families had resettled. While adopting a qualitative approach, data was collected using Focus Group Discussions and Indepth Interviews. The data was analysed using content analysis. The study established that the relationship between the settlers and their hosts was generally characterised by tensions. The tensions were caused by competition for natural resources such as land and forest products; cultural differences; and political affiliations. The study found that tensions and conflicts were experienced differently by the settlers. Where tensions were high there was reluctance to make long-term investments. The conclusion from this study is that the livelihoods of settlers to some extent depend on the quality of host-settler relationships. Poor relationships compromise the ability of the settlers to make permanent improvements to the land and therefore to the quality of their lives.