ENThis chapter examines the national body of literature on territorial inequalities and spatial differentiation in terms of socio- economic development in rural and urban regions. The assessment of regional development should be premised on a robust methodical framework that grasps the dynamics of several inter- related indicators such as demographic change, economic performance and labor productivity, public health, education and social exclusion and other quality of life parameters. In this chapter, we focus on the territorial inequalities in Lithuanian urban and rural regions and provide an overview of the socioeconomic differentiation at municipal level. In addition, the chapter reveals that focus on economic parameters and demographic indicators might limit the options to re- arrange the territorial development notion along the lines of social investment policies. The critical argument stretches the limits of bridging territorial development indicators and welfare policy instruments for more sustainable regional growth. Finally, we present the methodological notes on case study selection for researching diverse urban, suburban, and rural municipalities as empirical background for social investment policy analysis. [From the publication]