This article explores settlement processes and the difficulties experienced by refugee individuals and communities in Finland. Focus is also directed to the societal and institutional context of settlement, and how the formal status granted to refugees translates into actual participatory activity and linkages in the society. The study is based on primary data from two qualitative studies, conducted in 1993–1994 and 1997–1998, on settlement and integration in Finland. Data suggests that the integration process into an advanced welfare state can be distinct from other models. Strong social rights of settling refugees can occur alongside weak labour market status, bringing out features of ‘differential exclusion’, peculiar to settlement in this particular context. Finally, a frame is presented for conceptualizing the refugee integration process, incorporating the conditions of emancipation, parity, interdependence and cultural integrity.