Dundee has a small black and minority ethnic (BME) population, which has been neglected by previous research, as have BME populations in small towns and cities generally. As in other British cities, the residential locations of the main BME groups are distinct from that of the white population. After briefly reviewing the history of settlement in Dundee, this paper examines the extent to which patterns of ethnic segregation have changed between 1991 and 2001. Some moves towards dispersal and suburbanisation are identified but there are important contrasts between different BME groups. The implications of segregation for housing availability are assessed through Census of Population data. The hypothesis is posed that the consequences of segregation for housing disadvantage are greater in small cities such as Dundee.