It is important to realize that slum improvement programs involve interventions in a highly populated and deteriorated local environment. Therefore, in planning and designing of the interventions, the inside and outside environment of the slum are needed to be assessed with utmost care. As argued and empirically made the case in this paper, the siting and design of the interventions are to be finalized based on an EA. The survey results and field observations, based on which this paper has been prepared, show that slum improvement program could not mitigate the problems in the City-Polly slum due to non-assessment of the internal and external environment prior to the implementation of the project. Similar program has produced better result in the Bank-Maath slum where EA was undertaken. Slum dwellers surveyed for this study cited reasons for persistence of problems after the implementation of the interventions, which in all likelihood could have been avoided if an EA was undertaken before installation of the infrastructures. Lack of public participation and non-consideration of internal and external environment appear as key reasons for emergence of new problems in the slum after the implementation of the interventions. Integration of environmental assessment into slum improvement program is thus seen an essential part of the infrastructure installation to maximize the benefit of a program and minimize any potential negative impact. Having made the case both on an a priori reasoning basis and on its empirical verification through studies of two Dhaka slums, this paper has also outlined a mechanism of integrating EA in the slum improvement program.