This case study evaluation aims to explore employment impacts of the reformed East Wales RDP in East Wales, a UK region which is highly spatially differentiated. It concentrates on analysis of documentary evidence and representative in-depth interviews which support an evaluative interpretation of mechanisms of rural change. Issues explored relate to problems of the rural economy requiring policy intervention, and CAP rural development reform impacts on rural employment of farm households and workers in other sectors. Major concerns relate to youth out-migration, inadequate childcare provision, age structure, lack of affordable housing, pockets of deprivation, deteriorating service provision, labour supply, spatial diversity, and predominance of small businesses. Dual market failures appear to occur in employment and housing, requiring action to improve productivity, and spatial planning policies sensitive to rural requirements. The reformed RDP has had minor impacts on economic development, on the development of competitive premium agricultural products, professionalisation of the agricultural service sector, farm business adaptation, agri-environment support, and development of the food supply chain. However, the evidence indicates that Axis 2 should be strengthened to mitigate adverse impacts of decoupling. Also, future RDP spending should concentrate on Axes 3 and 4, its budget should be allocated on evidence-based criteria, and compulsory modulation should be increased. It should include provision of childcare services and other elements favouring female participation, and LEADER groups should be strengthened within a framework Rural Action Plans.