Most recent research concerning biofuels focuses on their potential for mitigating climate change, while their rural development dimension is given less prominence. Ongoing policy debates, including EU and US biofuel policies, pay little attention to this feature of the industry. This paper explores the impact of biorefineries on rural development, and employment in particular. It shows that biorefineries can have a considerable economic impact on the regions in which they are located. Embedded in the local social and economic fabric, the paper demonstrates their influence on regional and national labour markets. The case of a bioethanol plant in Hungary and its effect on the rural labour market in two counties of the country is studied by way of an input-output model. The research has found that the operation of a biorefinery stimulates the creation and maintenance of jobs in both farming and service industries. Results suggest that biorefineries are an important driver of rural development and that this aspect of the industry should be given greater weight in formulating biofuel policies.