This study goes beyond previous studies of Latino immigration, employment in agriculture and related conditions to examine the transformation of whole communities into “colonias” and the impact of Latino concentration on California’s rural areas. Over 140 communities are studies with over 25 facts collected on each community covering Census information on population and socio-economic conditions. The study uses simple regression and cross-sectional analysis to consider whether “colonias” are experiencing possible “underclass” conditions and/ or “exploitation” of rural Latinos and farm workers. On the other hand, the study also examines the possibility that Latinos are developing the positive enclave conditions of self-employment and private business activities in places where they are the majority. In general, we find that colonias are becoming impoverished communities of largely Spanish-speaking laborers and that the challenges facing colonos (the residents of “colonias”) are dim, offering few prospects for youth. We do not find many signs of “ethnic-economy enclaves,” wherein Latinos become more self-employed and develop local business, nor do we find positive fiscal conditions in “colonias” as compared to other rural communities where Latinos are in the minority. Colonias are growing in number and in their dependence on rural employment. They are places in need of much more research and analysis in order to address emerging issues for nineties.