Today, the number of hot-springs for therapeutics in Japan has been so small that it cannot be compared with that of hot-springs for tourist purpose. But, recently, therapeutic spa has been found to have increased its contemporary singnificance. In this paper, the author analysed the formation process, and change in function of Kakeyu hot-spring settlement of Maruko Town in Nagano Prefecture, as a typical example of large hot-spring sanatorium with modern rehabilitation facilities which was established at a small traditional health spa. Kakeyu hot-spring settlement is located at the small terrace of the Uchimura River, about 710_??_740m above the sea level (Fig. 1). For a long time from the Edo era to the establish-ment of the sanatorium in 1956, there had been built only 9 hotels without indoor bathplaces which were managed by the landowners near the Oyu public bath. The rest of the vill-agers were mostly engaged in farming, forestry and sericulture. In 1954, three farmers accidently found a very rich hot-spring with an amount of 3, 000 1/min. of hot water. Since the hot-spring of Kakeyu is effective for hyperpiesia, Nagano-Ken Kosei-Ren (Nagano Prefectural Union of the Welfare Societies for the Farmers) estab-lished a sanatorium (with 561 beds in 1975) in order to maintain farmers' health. At the same time, some farmers and stay-bathers opened new hotels, because a part of the water of the new hot-spring was shared among them. Since then, the hot-spring settlement has expanded and hotel accomodation has remarkably improved. That is, nine hotels with the accomodation fo 450 people in 1955 increased to 33 hotels with the accomodation for 2, 935 in 1975. And, labour shift from agricultural industry to service industry involving the sanatorium or the hotels was rapidly going on. In 1958, Nagano-Ken Kosei-Ren started the mass recreation system of a week's stay in the winter season for farmers of Nagano Prefecture. Its total cost being inexpensive, for example only 13, 460 yen in 1973, many parties of farmers (49, 000 people in 1972) have visited Kake-yu spa (Fig. 2). During the summer season, lots of old bathers come from Tokyo and in other seasons except winter, there are bathers from nearby districts. Therefore, the seasonal distribution of bathers is getting to be even almost all the year round (Fig. 3). The total number of bathers in 1972 was about 400, 000, and the bathers from both Tokyo and Nagano Prefecture occupied 30% of them respectively. In recent years, MVlaruko Town Office has the initiative to develop hot-springs with an intention of keeping out the large-scale enterprises. Especially, the integration of hot-spring was made possible in 1968 and it resulted in an intensification of union among people of the community (Fig. 4). This development of Kakeyu hot-spring settlement may be sug-gestive of remodeling many other hot-springs in the future.