This article reports the findings of a case study of social capital and economic development conducted in two towns in regional Australia between 2001 and 2002. The hypothesis driving the research states that a town displaying a high level of social capital will also display a high level of economic development, while a town with a low level of social capital will display a low level of economic development. Moreover, it is suggested the social capital will exert a positive causal influence on economic development. The study goes some way to confirming this hypothesis and provides empirical evidence to suggest that both bonding and bridging social capital are important for successful community economic development outcomes.