Slum rehabilitation programs in economically developing countries are designed to improve housing and enhance residents’ health and well-being. Yet no empirical research has directly investigated these objectives. Housing quality was assessed by trained raters on a walk-through among women in public housing as well as those currently in slums on wait-lists to relocate to public housing. Standardized, self-report measures of mental and physical health, quality of life, along with social ties in the neighborhood were assessed. Women who moved from slum housing to public housing manifest better physical and mental health but diminished social ties in comparison with women remaining in slum areas. Furthermore, housing quality, assessed by trained raters, largely explained the differences in health between the two groups. These quasi-experimental findings suggest that housing quality can enhance health and well-being of women, but that care must be taken to promote the maintenance of social capital following resettlement.