The study assesses the employment dynamics of LAU1 regions in Czechia (Czech Republic) in the period 2001-2011 using the territorial approach. It is operationalised on the basis of typological regions. Regions are differentiated firstly by their rurality according to the OECD methodology and the development of non-agricultural employment is used as the second differentiating characteristic. This reflects the regional differentiation based on the character of regional employment development potential. The specifics of rural regions are highlighted. Employment dynamics are assessed in the light of the process of employment restructuring both in its territorial and sectoral characteristics. The results illustrate employment in the service sector to be a viable driver of employment development regardless the degree of rurality but in absolute effects conditioned by its value. Furthermore,the employment development is conditioned by the sectoral structure of regional employment. Components of employment development are identified by application of shift-share analysis. The strength of the competitive effect describing the existence of locational advantages for specific sectors is further relativised to calculate its relevance for employment change. In conclusion,the existence of locational advantages has only a minor impact in terms of its relative size on employment change that would normally be expected. Therefore,either more precise regional differentiation is needed or the more disaggregated groups of sectors should be used.