The effects of racial concentration in shaping patterns of development in the rural South during the 1980s is examined focusing on the southern Black Belt (counties in ten southern states). Black Belt counties gained fewer or lost more manufacturing plants and tended to have more routine manufacturing than non-Black Belt counties during 1980–86. But racial concentration had little direct effect on either employment or per capita income growth. Counties with less educated populations (in both groups) had greater growth in per capita income through the influx of low-wage jobs, underscoring the importance of market forces in influencing patterns of development.