This report is based on a field study oftwo large settlements, Satghara (a census town) andBhagwatipur (a rural cluster with 10,000 plus population) inthe Madhubani district of Bihar. The study explores thesocial dynamics of the rural non-farm economy by empiricallymapping non-farm occupations in both the settlements. Itexamines the dynamics of caste, community, and gender withinthe social organization of the non-farm economy in terms oftheir economic and social hierarchies and the differentialincomes and status they provide. The study also looks at therelationship of the local non-farm economy with patterns ofoutmigration. It further attempts to understand the mannerin which the changes in the regional structures of power anddomination have influenced the local economic processes andare being influenced by them with a specific focus on thenon-farm economy in the two setting. The study also attemptsan assessment of the possible development and urbanizingeffects of the rather rapid growth of nonfarm economy inrural Madhubani.