This article analyses the interaction between movement towards a knowledge-based society and rural development in Latvia, as well as the conformity of a knowledge-based economy to the national structural policy for rural development. It is ascertained that Latvia's movement towards a knowledge-based society, which is identified in major national strategic documents as a goal, has not been realised in rural development policy; therefore, in rural areas the development of a knowledge-based society is only slightly observable. The concept of a knowledge-based economy in national structural policy, which defines rural development, is not laid out in detail, and the identified relevant measures are general and fragmentary. The authors of this article forecast that there will be no changes in the development of agriculture in the near future. In 2008, before the economic crisis, development could be observed in some spheres, while other spheres were liquidated. Experts forecast that with the increasing efficiency of production, the number of people employed in agriculture will decrease. Opportunities to work in other spheres should be provided in order to preserve the number of rural inhabitants. Therefore, there is a need for effective restructuring of the rural economy. It is concluded that the restructuring policy for rural areas in Latvia is vague and that the effect of a knowledge-based society in rural areas has not been assessed. Restructuring is slow and dependent on the receptivity of rural inhabitants to new ideas and proposals. Nevertheless, examples of successful development of new spheres can be observed in rural areas.