Peri-urban areas are often subject to intensive construction, through both formal and informal processes. As land transitions from rural to urban status, different land tenure and administration systems may come into conflict, leading to disputes, contestation and, in some cases, violence. However, little is known about the precise causes of peri-urban land conflict. In Mexico, peri-urban growth has historically proceeded peacefully, owing to the control exerted by a corporatist system of government, and the political use of land tenure regularisation. However, the effects of land reforms on transactions at the peri-urban fringe, in the context of wider processes of liberalisation, may be increasing vulnerability to conflict over land. This paper explores these issues through a case study of an irregular settlement on the peri-urban fringe of the provincial Mexican city of Xalapa, where contestations over informally developed land have escalated into violent encounters between groups of settlers and the state. The findings show that vulnerability to conflict in peri-urban areas can be attributed to the interaction of macro-level processes with local-level factors, including diverse claims, overlapping legal and governance frameworks and, critically, local power relations.