Monumental social and economic problems confront the rural communities of the South. Diversification of the rural economy is the key to revitalizing the rural South, but new industries, anticipating the need for a more highly skilled work force, find the region's human capital resources to be deficient. Vibrant economies are not sustainable in a rural South that leads the nation in the rate of high school dropouts and the proportion of adults that are functionally illiterate. In 1988 nearly 39% of all Southern nonmetro adults and 55% of Southern nonmetro blacks lacked a high school education, compared to 24.4% of all metropolitan Southerners. In 1980 an estimated 25% of all rural Southerners and 40% of rural Southern blacks were functionally illiterate. In addition, the better educated young people are leaving rural areas, showing the greatest net outmigration rates from the rural South in 1985-87. It has been suggested that these problems are symptomatic of an educational system gone awry, and that a turnaround must commence with an overhaul of the educational system. Placing the burden on the educational system alone is not, however, satisfactory. Rather, these problems must become the collective concern of the family, the school, and the community. Building partnerships among these important local elements is essential, partnerships that send a clear signal to all residents that academic performance and literacy are highly valued goals of the community. A vital ingredient in this collaboration is progressive community leadership. This paper contains 59 references and 10 graphs and figures. (SV)