The geographical position of the region, ethnic composition, acceleration of the process of polarization among rural settlements, and other factors increase the relevance of the research. The subject of the research is the study of rural settlement problems, and the object of the research is the villages and ethnic minorities of the Balakan district. The study aims to reveal the modern problems of the settlement of ethnic minorities and the formation of rural agglomerations, to study the causes of the emptying of some villages, and to prepare a rural development model to prevent the problems. To conduct research, the literature and statistical materials were analyzed, as well as cartographic, comparative analysis, SWOT, and modelling methods were used. Moreover, a field investigation was conducted in the research area. It was revealed that although a majority of the rural population settles in villages with a high demographic potential, villages with a weak demographic potential, due to their higher number, play a major role in the settlement system. Moreover, some villages form rural agglomerations, while some of them lose their population due to socioeconomic challenges. Due to the intense migration processes, some villages have turned into endangered villages (Mazimustu, Goyrujuluk), and even some villages are on the brink of extinction (Bayrambina, Mazimchay, Abjit). Studying the regulation of rural settlement in the region is of practical importance in terms of ensuring the equal development of the region, ensuring the security of the borders, and protecting ethnic minorities. However, there is still a need for serious research in this field.