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This paper aimed at bridging a literature gap in the application of qualitative research methodologies in the Rural Entrepreneurship Development (RED) studies. Having carried out a focused literature review on Grounded Theory (GT) and Rural Entrepreneurship Development (RED), a model of an application of major GT approaches in researching RED has been developed. The study, sought to resolve the main questions of: what are the major research areas involved in RED process? Where can the main approaches of GT be applied? And how should the GT methodologies be applied in researching about RED?