This paper examines the involvement of demographic processes in the residential segregation of ethnic groups in an urban area. For this purpose, a two-part methodology has been employed. The first part comprises a conceptual framework which uses the concept of time-space resources as an analytical tool to clarify the structural constraints embedded in the changes in ethnic residential distribution. The second part comprises a simulation model of ethnic residential segregation. The model, which fits into the category of agent-based simulation models, serves as a tool for heuristic study. The methodology has been applied to examine the implications of fluctuations in ethnic group diffusion and the residential mobility rate on the majority-minority residential segregation, and on the internal ethnic segregation within the minority group.