Policy-makers and planners in the developing countries now widely recognize that the location of services and infrastructural facilities play an extremely important role in the rural development. Furthermore, improved geographical accessibility to basic services for rural population is a fundamental goal for most governments in the developing countries. On the basis of provision of services in locations nearer to rural areas, planners face two different approaches, namely, urban functions in rural development (UFRD) and location-allocation models (LA). This article compares the nature, scope, advantages and limitations of both of the above mentioned locational planning methods.Findings indicate that urban functions approach and location- allocation models are different in nature and scope and deal with different problems and issues. Urban functions in rural development deal with how to integrate services and infrastructures to strengthen the role of towns and market centers to facilitate regional economic development while location-allocation models deal with how to maximize access for a segment of rural population to particular services or facilities. Nevertheless, the goal for both approaches is to redress the conditions of spatial and social inequality by improving access to necessary goods and services. The underlying rational for either approach is that service gaps in the given central place are filled in a hierarchical manner in order to enhance access to necessary goods and services. Although, there are real differences between these two methods, they have important similarities, and central place theory is the common root of both approaches. Both have useful elements for rural and regional planners, but in view of difference in nature and scope, they should not be viewed as mutually exclusive alternatives.