Control over a broad range of programs is being shifted back to state and local jurisdictions. Based on focus groups, interviews, and surveys of those who live in or represent organizations with a strong interest in rural America, this report highlights the concerns of rural communities towards these changing intergovernmental relations. Challenges to governmental devolution include a lack of clarity in the responsibilities local governments are expected to assume, a lack of administrative infrastructure and experience to manage the new responsibilities, a lack of expertise and experience in long-range planning, difficulties in gaining broad-based participation in community decision making, and a sense among rural leaders of alienation from the sources of decision making. Opportunities identified were that local management will permit creativity in program design, program goals can be determined within the context of local priorities, and devolution could strengthen the capacity of local governments to handle their responsibilities, thus empowering local communities. Critical needs in implementing this new paradigm include open lines of communication among federal, state, and local officials; a wide range of training and technical assistance for local leaders; and increased access to data and information resources for conducting community assessments, designing programs, and evaluating programs. Federal and state governments and land grant universities must provide support by recognizing the limited fiscal and administrative capacities of rural governments; providing opportunities for more communication between governments, among communities, and between citizens and governments; and assisting in building collaborations and partnerships. (TD)