This paper differentiates between the "old story" of rural education and the emerging "new story." It describes the tradition (old story) in which rural education is related to the local and national economies and lays out fragments of the new story, a paradigm that combines rural education and the rural economy in a way that strengthens them both. The old story reflects society's continuing shift from agriculture to industry and from industry to information. It suggests that rural schools have two purposes, to educate students either as participants in communities that are perpetually dependent on natural resources, or to take their places in urban industrial America. The result has been urbanization and rural decline. The new story says rural education is responsive to changing economics, demographics, and societal expectations. It holds promise for improving opportunities for rural children and communities. The characteristics of rural education are decentralization, diversity, unpredictability, evolving outcomes, high value for flexible generalists, and small scale. The mission of rural education is to meet community needs. Schools should provide choices for students who choose to stay in rural America, as well as for those who leave. Local boards regain central importance. Bureaucracy is limited. Curriculum is redesigned for authentic, relevant learning. Course delivery more closely predicts learning situations students experience throughout their lives. Teachers are generalists trained to help students find and use information. Schedules fit the task. Schools change from isolated hierarchical bureaucracies to networks of flexible, interdependent agencies acting in symbiosis with their communities. In conclusion, several examples of the "new story" in action are described and a list of 44 references is also provided. (TES)