This paper is organized into two main sections. The first section examines extension as an engine for innovation and reviews the numerous priorities confronting extension systems. Section two highlights the current knowledge imperative and the critical connection of extension to post-secondary higher education and training, organizational inservice training, and vocationally oriented self-directed learning. Final comments address "The Continuing Role of the Public Sector", and the prospect of its role in balancing societal interests and promoting extension as an aspect of a knowledge economy. The conclusion proposes what may be agricultural extension's challenges ahead. (Contains 3 figures and 2 notes.)