The post-1994 system of back-to-back local government changed the realities of municipal governance everywhere – but more so in rural areas than anywhere else, where urban and rural municipalities were amalgamated. The fact that there was no uniform tradition of local governance outside of the old white municipalities and the huge range of on the ground challenges presented by rural conditions in South Africa makes rural areas a litmus test of successful developmental local government. Critical issues include not just the depth of poverty, but also the lack of municipal resources and the anticipated and unimagined difficulties of operating across spheres of government. This chapter seeks to analyse the particular challenges facing rural local government in South Africa. It begins with a discussion of the definition and demography of rural areas, the characteristics of rural areas and the challenges posed for rural development. Local government is a key actor in addressing rural development and we look at the interaction between local government and other levels of government as well as the relationship with key stakeholders. Issues in delivery of rural services and efforts to promote local economic development are highlighted. The strengths and weaknesses of rural local government and challenges for the future are identified.