After a huge natural disaster, what are the factors that make recovery of the society possible? This paper examines how social capital has worked in the process of recovery and reconstruction in Kobe, Japan, since the Great Hanshin Awaji Earthquake in 1995. After ten years, the population of Kobe returned to its pre-earthquake level. It looks as though the city has recovered well. However, if we look closer, ward by ward data gives a different picture. Even if each ward suffered a similar level of damage, some have recovered faster than others. For this reason, this paper looks further into the factors that caused this difference. To analyze these factors, this paper focuses on the tertiary sector within Kobe because there has been a structural shift away from the secondary sector due to the damage caused by the earthquake. Additionally, the tertiary sector accounted for 80% of employment, the most important factor for reconstruction over the mid- and long-term. The paper uses panel data from 1995 to 2010, and employs social capital proxies, such as households where three generations live together and crime rates, to examine the factors of recovery. The empirical analysis found that social capital is the factor that generates more jobs in the tertiary sector, thus, the factor that created the differences in the pattern of recovery among wards. The findings indicate the ways a recovery can be made faster after future natural disasters so as to create resilient societies.