This review discusses the challenges and opportunities of German rural areas. Significant differences between East and West persist and many of these have clear rural dimensions. Factors such as CAP reforms, ageing of the German population and migration trends will also have important rural implications. Many of these issues involve more than rural policy, but rural policy has a place in resolving all of the key issues. However, for rural policy to be an effective part of the policy process it will have to evolve beyond the existing limits in Germany. This review states that Germany's current approach to rural development and rural policy is mainly sectoral and thus does not fully capture the diversity of rural regions.