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Local Action Groups (LAGs) are a promising development approach that has gained prominence across the world. They are underpinned by participation of all local actors (community-led rural development) as the main precondition for generating and sustaining economic development in rural regions. Despite this potential, there has been a dearth of scientific studies that have investigated the potential role of LAGs as a rural transformation approach in the Eastern Cape Province of South Africa. Therefore, the current paper sought to identify existing local action groups and explore their role and potential to promote rural development. A concurrent mixed-methods approach was adopted to attain the study objective. Four hundred households were purposively drawn from two rural local municipalities, Amahlathi and Nyandeni, in the Eastern Cape Province. Survey questionnaires and semi-structured interview guides were used to collect data. Results showed that existing LAGs were mainly burial societies, cooperatives, farmers associations, women's organisations, and financial saving schemes. The main roles of these LAGs were to enhance food security, boost income generation, and foster social cohesion. However, despite their contribution, LAGs have not reached their full potential as a conduit for rural development owing to the limited involvement of relevant rural development stakeholders. Therefore, adequate targeted support is required from both the public and private sectors to unlock the potential of LAGs as a catalyst for rural development. [ABSTRACT FROM AUTHOR]