This study aims to analyze the potential and constraints of group-based extension approaches as an institutional innovation in the Vietnamese agricultural extension system. Our analysis therefore unfolds around the challenges of how to foster this kind of approach within the hierarchical extension policy setting and how to effectively shape and enable learning groups. The analysis draws on qualitative data from case studies of five newly established extension groups in Son La province, collected between 2007 and 2008. Content analysis was applied as the main analytical tool. The basic principles of group-based learning approaches are still underdeveloped, mainly due to a non-supportive institutional environment and a command-and-follow mentality. Extension groups suffer from an insufficient distinction between social processes and technical procedures. Finding an appropriate balance between enhancing leadership and supporting collective responsibility is identified as key to sustain groups. The research identified room for adjustments in group-organizational issues since the external institutional environment is hard to change. The particular value of this paper lies in addressing how to organize group-extension approaches in the context of reformed extension systems in a transitional socialist setting. (Contains 1 table.)