In an important sense the problem of unemployment and underemployment, and to a considerable degree the problem of low incomes is not a national or general one; rather to a great extent these problems are confined to particular regions or to specific sectors within the general economy. East Kentucky is a rural region suffering from these problems due particularly to geographic isolation, depleted resources, and relative isolation in the general pattern of economic development. A comprehensive and penetrating analysis of the structure and functions of the region investigates the region's difficulties and presents some hopeful possibilities. The penetrating analysis of the economic facts of the region and their interrelationships with educational opportunities, mountain history, and geographic factors presents challenges to existing policies and provides suggestions for future regional development. (DK)