The European Union's LEADER Initiative represents an attempt to generate rural development at the 'grass-roots' level. The paper examines the application of the Initiative within Spain and, in particular, two contrasting rural areas of Andalusia. It is argued that some of the features of the way in which LEADER was initially established may have acted against the successful achievement of endogenous rural development and it is demonstrated that the relationships between local areas and the regional, national and European levels have been problematic. More specifically, it is shown that the characteristics of the two selected rural areas of Andalusia significantly influenced the nature of the local programmes proposed, with - in one case - a failure to comprehend the essential nature of the scheme. However, in neither case can it be argued that a truly 'grass-roots' level of development has been stimulated as there is little evidence of significant change in the process of social mobilisation with the objective of promoting self-reliant development. Instead, the Initiative has led to considerable emphasis being placed on the development of tangible products and projects.