Community participation in health service decision making is entrenched in health policy, with a strong directive to develop sustainable, effective, locally responsive services. However, it is recognised that community participation is challenging to achieve. The aim of the present study was to explore how a rural health service in Victoria enacts community participation at the local level. Using case study methodology, the findings indicate that enactment of community participation is desired by the health service, but a lack of understanding of the concept and how to enact associated policy are barriers that are exacerbated by a lack of resources and community capacity. The findings reveal a disconnect between community participation policy and practice. What is known about the topic? The need to involve communities in health service planning, implementation and evaluation is a feature of health policy across major Western countries. However, researchers have identified a dearth of research on how community participation is enacted at the local service level. What does this paper add? The study that is presented herein addresses a gap in knowledge of community participation policy enactment within a rural health service. Insights are provided into the challenges faced by rural health services, with a disconnect between policy ideal and the reality of implementation. What are the implications for practitioners? Health service staff need clear direction from chief executive officers about the purpose of community participation policy and the expectations for individual roles. Community advisory committees need clarity about the community member role and the processes for making decisions. Services and their boards would benefit from targeted government funding to resource community participation activity.