This thesis investigates the complex relationship between residential segregation and social integration. The dominant discourse in Sweden and Europe sees residential segregation as hindering socioeconomic and cultural integration, creating parallel societies and even threatening the social cohesion of European societies. Residential segregation might be a sign of social exclusion and discrimination, but it might also result from informed choices to self-segregate into particular neighbourhoods. Minority ethnic clustering, some argue, might have positive attributes, such as providing access to social capital embedded in ethnic communities. This thesis analyses the relationship between segregation and integration from the perspectives of two research traditions: drivers of segregation and neighbourhood effects. The thesis employs individual annual Swedish registry data and a k-nearest neighbour approach to identify residential neighbourhood contexts. Paper I studies the out-mobility of three cohorts of young adults from large housing estates (LHEs) in Stockholm County against the backdrop of increasing inequality, stigmatization, and deteriorating conditions in these areas. From 1990 to 2014, income became more and ethnicity less important in explaining mobility. However, it is the combination of the two that determined sorting for all cohorts. The study also clarifies how different neighbourhood conditions within LHEs affect sorting patterns. Paper II analyses the residential mobility of immigrants towards native-dominated neighbourhoods. The study concludes that ethnic hierarchies strongly shape residential outcomes and increased income alone does not necessarily translate into residential mobility. However, spatial integration can be facilitated by a better housing market position at the start of the housing career in Sweden, improved socioeconomic outcomes, and residing outside metropolitan areas. Paper III examines the potential of ethnic economic capital in the neighbourhood (measured as share of employed co-ethnics) to bolster employment prospects. The results of the multi-scalar analysis of four immigrant groups show that an increase in ethnic economic capital can have a positive effect on immigrant males’ employment prospects, but the effect size varies between groups and neighbourhood scales. The main conclusion of this thesis is that the relationship between residential segregation and social integration is not straightforward, but rather is complex and nuanced. It varies between groups with different backgrounds, but also between settlement contexts within Sweden and between neighbourhood contexts within cities. It changes over time and is influenced by the spatial scale of neighbourhood context measurements. This thesis demonstrates the usefulness of employing flexible scalable individual neighbourhoods in conceptualising space when studying social processes.