One of the main issues facing almost all European regional policy-makers is how to ensure a smooth adaptation of their industrial structure in the face of changing societal and technological parameters. In the case of the Belgian region Wallonia, industrial decline has particularly marked the economy during recent decades and the need to promote structural change has been a central preoccupation of national and, subsequently, regional governments. At the same time, the highly complex system of governance in Belgium renders the definition and application of a coherent regional industrial policy difficult. This paper explores the development of industrial policy in the Walloon region with particular attention to the period since 1990 and the pertinence of the instruments and delivery mechanisms with respect to the underlying structural issues facing the regional economy. The paper is divided into four sections: the first offers a historical profile of the industrial development of the Walloon economy and in particular identifies some of the factors which provoked a serious structural crisis. The section reviews the economic impact of the successive phases of rationalization and diversification which have taken place since the 1970s and discusses how the industrial strategies adopted by the business sector and supported by the regional government have influenced the speed of economic regeneration. The second section considers the complex federal system of government in Belgium and how it influences the freedom of action for regional industrial policy. The governance of the economy by the numerous public or semi-public institutions active in the field of industrial policy is a crucial issue. A critical review of the main initiatives, instruments and targets of industrial policy in Wallonia is offered in section three, while the paper concludes by contrasting the Walloon industrial policy with initiatives taken in the neighbouring area of South-West Flanders and ponders the issue of whether in the end the key factor arresting the development of Wallonia is the insufficient level of 'social capital'.