There is currently a debate in Switzerland about the future of peripheral rural areas and adequate policies for maintaining the decentralized settlement patterns of the country. This article presents an interdisciplinary analysis of the issues of decentralized settlement by focusing on the challenges faced in this realm by the region of Surselva in the Canton of Grisons. More precisely, we analyze the economic, institutional, infrastructural and ecological implications of recent socio-economic changes in this region, showing that the current pressure on decentralized settlements is a multi-dimensional phenomenon. The analysis draws on data stemming from 19 qualitative interviews, secondary socio-economic and survey data, as well as ecological modeling. Overall, the results show that there is not a uniformity of pressures on decentralized settlements in the Surselva region. At the economic level, the situation is one of a patchwork, polarized regional development, where areas of decline co-exist with pockets of dynamic growth. At the institutional level, municipalities in the declining areas have come under strong pressure to amalgamate, in spite of local resistance. The effect is looming political catharsis in these areas. Concerning infrastructure, the general problem is inefficiency due to oversize capacities, either because of shrinking demand (in declining areas) or high seasonal fluctuation of demand (in growth areas). Finally, ecological modeling shows that the eventual extension of land use would lead to a loss of biodiversity resulting in a significant change of the landscape. In the conclusion, the implications of these findings for Swiss regional policy are discussed more generally.