The paper discusses the role of rural small and micro enterprises in Pakistan in terms of employment generation, poverty alleviation and creation of linkages to accelerate the process of rural development. Considering the importance of the sector; the government has created several channels of finance and other support organizations. Besides. the Investment Policy 1997 allows for foreign investment in agriculture and includes agro-based industries as priority manufacturing activities. The paper highlights the constraints and suggests policy options for promotion of rural small and micro-enterprises in Pakistan. In this context, the need of reorientation in four key areas e.g. skill, credit, marketing and government policies are emphasized.