Ever since a number of centuries non-agricultural activities play an important role in the rural economy of Java. The last decades, their significance has increased further. Presently, close to half of both primary employment and income in rural Java originate from outside the agricultural sector. In this contribution, the history of rural industry on Java is outlined and the recent developments in its rural economy are subsequently summarized. Ensuring this, result from both enterprise and household survey s as recently carried out in Yogyakarta are presented and analyzed. This with a view to assess whether the behavior of the various components of the rural non-farm economy in the area is in line with developments in Southeast Asia as a whole as sketched by Saith (1992) in his publication on the rural non-farm economy in developing countries. A number of conclusions are arrived at pertaining to the relevance and applicability of his model to the Javanese context. Finally, as assessment of the prospects of rural industry in this part of Indonesia is presented and contrasted with his findings.