During the last ten years the small manufacturing enterprises (SMEs) sector has become firmly established at the top of the development agenda for many countries, hence, marking this sector's increasingly acknowledged economic importance. Evidence from various parts of the world has shown clear signs of the growth of SMEs. Despite this, little attention has been given to understanding the environmental impacts these enterprises produce or to defining the role these entities play in terms of sustainable regional development. This thesis sets out to contribute to a better understanding of the influence of SMEs on sustainable regional development, as well as the contribution of SMEs to the economy in terms of job creation in the context of developing countries using Egypt and its Ismailia region as the basis for case study. Three main hypotheses were formulated relevant to the role of SMEs in sustainable regional development. In general, these hypotheses relate to the following: 1) The contribution of SMEs to the regional economy; 2) Problems and barriers SMEs face in achieving sustainable development; and 3) The potential for SMEs to utilize available existing resources to enhance their role in achieving sustainable regional development. In order to test these three hypotheses and to answer related questions, an analysis was undertaken within the framework of two spatial tiers: national and regional, that is Egypt and Ismailia, respectively. Two types of data were used - primary and secondary. A sample of 101 entrepreneurs and 100 workers were interviewed from the Ismailia region. The results of these interviews were analyzed in the empirical portions of this thesis. Chapter one pertains to the justification of the thesis; its objectives; the development of related research questions and hypotheses; the methodology used for data analysis; data sources used; questionnaire design; survey methods; and problems of data collection. Chapter two discusses the concept of SMEs worldwide and in Egypt as a basis from which to provide a concrete definition of SMEs that is used in the empirical portion of this study. In addition, the potential of SMEs and the problems facing SMEs in terms of sustainable regional development, the differences between SMEs and larger enterprises, as well as the importance of SMEs for the Egyptian economy are discussed in this chapter. The relationship between SMEs and sustainable urban and regional development is highlighted in more detail in chapter three. This relationship is discussed within the context of the notions of the overall concept of sustainable development, the sustainable regional development agenda in Egypt and related regulations, and the positive characteristics SMEs need in order to bring sustainable urban and regional development to fruition. Chapter four examines the first hypothesis of this study; this hypothesis states that, in general, SMEs have a positive effect on the economic and social development of a region. This chapter evaluates the ability of SMEs to drive the regional and national chains of economic added value; the capability of SMEs to create job opportunities at the regional level; and the effects of SMEs in terms of improved life-style and standard of living of workers and their families. Chapter five tests the second hypothesis in this thesis which states that the affects of a variety of types and sizes of SMEs on regional sustainable development is limited, at least for the time being. This chapter provides an analysis of economic, social and environmental obstacles and constraints that SMEs must face on a daily basis to achieve sustainable development in the region. In chapter six the potential by which SMEs can utilize their assets to enhance their contribution to sustainable regional development is evaluated; the potential opportunities available to SMEs to make better use of local raw materials and to drive the chain of economic activity within the Ismailia region were examined. The ability of SMEs to work more efficiently through the use of clusters and networks as a potential strategy is clarified. Chapter Seven presents a compilation of the detailed findings of this thesis along with the lessons that have emerged as a result of the research conducted. A series of policies and recommendations are provided as a means from which to create favourable conditions to encourage SMEs to play a more significant role in the national economy and in subsequent sustainable regional development. From a national perspective, the activities of SMEs are not usually the most serious source of environmental degradation, but, collectively, their sheer numbers may translate into substantial impacts on the eco-system. While the individual SME has financial problems related to the treatment and disposal of its waste, the adoption of an industrial cluster strategy for SMEs can provide an efficient solution to this problem. A cluster should consist of several single enterprises located in close proximity to one another, thereby, improving the ease of and costs associated with the treatment and disposal of environmental wastes. This study advocates the necessity of raising the degree of environmental awareness for organizations, syndicates, unions and societies related to SMEs, as well as entrepreneurs and labourers in their respective domains. Opportunities for raising environmental awareness can be implemented through a series of organized seminars, meetings and workshops designed to motivate individuals and small businesses within the society of SMEs to incorporate an ecological sense and approach into their daily behaviour and practices. A national policy must be adopted in Egypt in order for the SMEs sector to be successful in its contribution to sustainable development. Such policy must be all-inclusive and provide for the technical support of SMEs, financial support to SMEs, environmental support to SMEs, as well as provide overarching legislative support relevant to this particular sector of the business environment.