The central hill country of Palestine, from the Jezreel Valley in the north to the Beer-sheba Valley in the south, has been almost fully surveyed in the last two decades. The article summarizes the archaeological data on the sites and settlement patterns in the region in three phases of the fourth and third millennia B. C. E.-the Chalcolithic, the Early Bronze I, and the Early Bronze II-III-and compares them to the settlement patterns in the lowlands of the country. The highlands, which form the best-suited part of Palestine for horticulture-based economy, experienced a dramatic settlement and demographic growth in EB I. This wave of settlement was contemporaneous to the establishment of Egyptian trading communities in the southern coastal plain. The demographic expansion to the hill country was apparently stimulated by the growing demand for Palestinian horticulture products in Egypt. The intensification of agricultural specialization in the highlands and in other parts of the country played an important role in the urbanization process in the southern Levant, which also commenced at the end of EB I.