Dominant ‘society centred’ interpretations of social capital in Australia are inadequate to explain the economic fortunes and social prosperity of rural Australian communities. Given the continued contention over interpretations and measurement of social capital, this research sought to assess the relationship between different interpretations of social capital and rural communities’ resilience and prosperity. ¶ Utilising both quantitative and qualitative techniques to establish the relative levels of social capital in two communities of divergent growth, the primary objective was to test the association asserted between levels of social capital and prosperity and resilience in the rural Australian context. ¶ The research findings highlight three notable issues. Surveying social capital with current instruments is only effective in establishing the well being of rural communities which appears related to their resilience, not their ability to prosper. Secondly, the operational frameworks and responsibilities for social capital adopted by governments dictate the manner in, and degree to which they deem bridging and linking networks necessary and appropriate. This significantly affects the role social capital is perceived to play in communities. Lastly, while interpretations of social capital regard it as a normative factor in social life, rather than being comprised of different and dynamic elements affecting communities’ ability to prosper, the concept will remain unable to effectively contribute to the policy domain.