The article examines current challenges in managing rural development in Russia. The key directions of rural territorial development are analyzed. Approaches to governance and specific mechanisms to stimulate rural development are presented. The functional structure of governance at various levels of state authorities and local self-government institutions is outlined. The principal factors determining the utilization of available sectoral potential in agricultural territories are characterized. Based on the analysis conducted, the high importance of local community initiatives in territorial governance is identified. It is evident that residents currently participate little in the formulation of development initiatives, despite opportunities for such engagement. Building on the presented material, conclusions are drawn about the existing deficiencies in the system of rural territorial management, and recommendations are formulated to improve it in the context of the transition toward sustainable development.