Resettlement is one of the risk reduction measures in the field of disaster management. The Government of Pakistan has worked out a plan of resettlement of the Balakot town to mitigate the risk of earthquake hazard. In post-earthquake scenario, residents of the Balakot town interacted with the changed physical and economic environment. The line agencies of the Government guided this interaction of environmental adaptation or resettlement processes through laws, regulations, incentives, and penalties as providing: new site for Balakot town at Bakryal; declaring old Balakot town in red zone; discouraging developmental activities in the old Balakot town; and formulated the future plans for old and new Balakot towns. The process of resettlement of Balakot town has been directly affected by some important factors such as: the perception of the residents of Balakot town about hazards; economic opportunities; centrality; and hazardous site of the old Balakot town; planned site of the new Balakot town; distance between the new and old Balakot towns; location of the new Balakot town; economic opportunities at new Balakot town; justice and equity in the resettlement policy; and obstructions which are delaying the project. The old Balakot town was a hub of political, social and economic activities while the new site at Bakryal is supposed to have good infrastructure facilities. The interacting physical and economic environment for the residents of the old Balakot town was quite complex and uncertain as these influencing factors and resettlement policy of the government offers both hopes and worries. They are hopeful about safe and sound life in the new Balakot town but worried about their businesses and social status which they are enjoying in the old Balakot town. Thus, problems are created by this uncertainty on one hand and prospects due to new opportunities on other hand. In the present study, the resettlement problems of uncertainty and prospects due to opportunities have been studied through site and situation analysis as it covers all the interacting situation of environmental adaptation or resettlement processes. The uncertain situation of Page | viresettlement of the Balakot town has been elaborated in the form of site and situation. The site of the old Balakot town is hazardous while the situation is convenient, while on the other hand the site of new Balakot town is feasible but the situation is not encouraging. The second important aspect is the totally different perception of the two major stakeholders i.e. the Government and citizens of the Balakot about the opportunities & risks for the old and new Balakot towns, respectively. It is well known fact that ultimately, the successful resettlement of the Balakot town would be dependent upon citizen’s perception. The site and situation factors have been analysed both for the old and new Balakot towns to formalise their existing and future physical and economic status. The response of the residents of Balakot while interacting with the current physical and economic environment has been studied and problems have been identified that create uncertainty about the future of the old and new Balakot towns. This study is aimed at identification of the problems of uncertainty and future prospects of the resettlement of Balakot. On the basis of this study a tool has been developed. The basic components of this tool are: policy of the resettlement, site and situation of both old and new Balakot towns. Each of the three aspects has six major steps: major variables, existing conditions, problems, proposed solutions, testing response and modification & finalization. In this tool, major variables are further divided into minor factors for which the desired and actual response of the residents of Balakot has been analysed for the purpose of problem identification. After identifying the problems, the measures to resolve these problems in post disaster scenario have been suggested. These measures are based on the available resources to streamline the resettlement process and achieve the desired response. To standardise the mechanism, these measures are also tested against the response of the residents of Balakot. The final output of the study is in the form of a tool which provides a standardised mechanism for desired development. This tool can be applied with some modifications to other resettlement processes as well in future.