Despite all initiatives and endeavors, Iran’s rural communities are encountering with challenges regarding the achievement of comprehensive development. Space economy is associated with location distribution of economic activities as well as movement and flow of population, goods, services, and capital. These in turn, would have great impact upon the development level of different settlement including towns and countries and their interrelations. The major objective of this study is to investigate the impact of space economy upon rural development. The study area is Shaft district located in Gilan providence. Data gathering technique is tied to direct observation, interview with local folks as well as filling questionnaire .This is further supported by application of inferential statistics including regression correlation techniques and top SIS model. This study suggests that concentrated social-economic system is associated with imbalanced location of economic activities. It is argued that spatial arrangement of economic activities is major determinant of flow of population, goods, services, and capital and further influence regional development of rural as well as urban nodes. This in turn, would question the qualification of rural
development.