The number of farms in industrialized countries has been declining continuously over the last few decades. The transition from an agrarian to an industrial society is a complex process involving many consequences to the economy as a whole and particularly to rural regions and communities. The industrial countries have tried to cushion the adjustment process, mostly by using agricultural policy tools, but they have proved to be incapable of preserving the viability of rural areas and recognizing their increasing diversity. In the U.S., the 1980s reversed the favorable rural growth trends of the seventies. The nonmetro population growth slowed and the traditional sectors of rural areas suffered from unfavorable trade conditions and from the recession of the early eighties. Generally, rural areas in all industrialized countries have become more vulnerable to world market trends. Improvements in transportation and telecommunications provide rural people and communities with more possibilities for economic development. The social and economic changes taking place in rural areas create both challenges and opportunities for local and national policymakers. A better understanding must be achieved concerning the role of rural areas in the transition from an agrarian to an industrial economy. A successful rural policy must be based on the recognition of increasing diversity of rural areas.