The spatial arrangement of settlements constitutes a long-lasting legacy and shapes the prospects for transformations toward sustainability. Thus, understanding the drivers of changes in settlement patterns is essential. In this article, we present a spatially explicit, geostatistical analysis of settlement dynamics, and a qualitative investigation of its regulative, demographic, and economic drivers, using the example of Vienna, Austria between 1984 and 2018. Combining spatially explicit metrics of urban sprawl and cluster analysis, we analyzed high-resolution maps of buildings, population, and jobs to identify distinct settlement trajectories. Societal drivers of more or less sprawled settlement dynamics are analyzed with desk research and expert interviews. We distinguish five types of settlement dynamics: persistently dense areas with increasing use intensity, re-densification of dense areas, persistently sprawled areas, redensification of sprawled areas, and persistently isolated buildings. Urban renewal schemes have fostered the re-densification of dense areas in response to population growth and urban economic restructuring. The combination of urban renewal schemes and green space policies has successfully limited urban expansion. Challenges arise from the demand for single-family housing and corresponding zoning regulations. These factors solidify existing sprawled settlements, posing obstacles to the efficient re-densification of such areas crucial for sustainable urban development.