The first Mesopotamian city-states in the Uruk period (ca. 3800-3100 B. C.) pursued a strategy of commercial expansion into neighboring areas of the Zagros Mountains, Syria, and southeastern Anatolia. Recent research in these areas has located several Uruk outposts, in what is apparently the world's earliest-known colonial system. Although some Uruk "colonies" have been excavated, virtually nothing is known about either the operation of this system or its role in the development of local polities in Anatolia. Excavations at the site of Hacinebi, on the Euphrates River trade route, investigate the effects of the "Uruk Expansion" on the social, economic, and political organization of southeastern Anatolia during the fourth millennium B. C. Hacinebi has two main Late Chalcolithic occupations - a pre-contact phase A and a later contact phase B with high concentrations of Uruk ceramics, administrative artifacts, and other Mesopotamian forms of material culture. The Hacinebi excavations thus provide a rare opportunity to investigate the relationship between the Uruk colonies and the local populations with whom they traded, while clarifying the role of long-distance exchange in the development of complex societies in Anatolia. Several lines of evidence suggest that the period of contact with Mesopotamia began in the Middle Uruk period, earlier than the larger colonies at sites such as Habuba Kabira-South and Jebel Aruda in Syria. The concentrations of Uruk material culture and the patterns of food consumption in the northeastern corner of the Local Late Chalcolithic settlement are consistent with the interpretation that a small group of Mesopotamian colonists lived as a socially distinct enclave among the local inhabitants of Hacinebi. There is no evidence for either Uruk colonial domination or warfare between the colonists and the native inhabitants of Hacinebi. Instead, the presence of both Anatolian and Mesopotamian seal impressions at the site best fits a pattern of peaceful exchange between the two groups. The evidence for an essential parity in long-term social and economic relations between the Mesopotamian merchants and local inhabitants of Hacinebi suggests that the organization of prehistoric Mesopotamian colonies differed markedly from that of the better-known 16th-20th century European colonial systems in Africa, Asia, and the Americas.