This chapter addresses what development agencies actually do and the tools they use. A summary of core activities of development agencies is presented and the argument is developed that while what these agencies do is obviously essential, how it is done is equally important. It is established how these activities are done by categorising the roles that a development agency might play in a local development system. It is underlined that without a thorough consideration of both what activities are undertaken and how they are undertaken, the contribution of development agencies to sustainable local development may be misunderstood. The chapter begins with an overview of some of the approaches used to categorise development agency roles, and concludes by detailing the roles played by development agencies in the formulation of local development strategy.