Recent social capital literature has extended the concept from an individual attribute to a characteristic of communities. As a community-level attribute, social capital has been increasingly linked to community well-being and local development. In light of this, this study examines whether and how community-based social capital is associated with community and economic development. Adopting Portes and Landolt's theoretical framework, community-based social capital is conceptualized and measured according to three forms---enforceable trust, value introjection, and bounded solidarity (2000). Community development is defined by process; measurement is limited to two integral community development principles---citizen participation and knowledge generation. Economic development is also defined by process and is measured according to a community's level of economic development activity. Quantitative analysis is based on data collected from 98 Iowa communities in 1994 and 1997. Findings indicate community-based social capital forms contribute to community and economic development. In particular, community-based social capital in the form of value introjection is consistently associated with local development. Findings are discussed within the context of implications for theory, future research, and local development practice.