This article reports on archaeological and geomorphological research carried out by the 1988 R�o Verde Formative Project in the lower R�o Verde Valley, Oaxaca, Mexico. The research suggests that the region was only sparsely inhabited prior to 500 B. C. During the Late/Terminal Formative (400 B. C.-A. D. 250), however, survey data suggest that the lower R�o Verde Valley experienced considerable population growth. Excavations at the sites of Cerro de la Cruz and R�o Viejo yielded evidence for emerging status inequalities during the Late Formative leading eventually to the rise of complex social organization by the Classic period (A. D. 250-900). Two preliminary explanations are offered for the seemingly late occurrence of large populations with complex social organization in the region. The explanations focus on environmental change and interregional social interaction, respectively. Evidence for the exploitation of coastal habitats is also discussed, since the use of marine and estuarine resources could alter the implications of both explanations of societal change.