The notion that entrepreneurial activity is an important driving force for facilitating development is not new. To date, influential empirical research that is focused on the small community context of the entrepreneurship debate is still emerging. Moranbah in Queensland, Australia, is a case example of a small mining town that is characterised by a two-stream economy: the prosperous mining-employed stream and the much less prosperous non-mining employed stream. In as much as the local entrepreneurship stream in Moranbah offers a potential driving force to rebalance these two extremes in the current economy, the distinct prevalent conditions in the region pose threats that undermine the capacity of local entrepreneurs. This paper presents empirical evidence of how the socio-spatial, economic, political and cultural environments in Moranbah has put its entrepreneurship stream under a siege. The study found three key threats to entrepreneurship in Moranbah: (i) the nature of the ties with all levels of government, (ii) lack of status for local entrepreneurs, and (ii) the current business model direction taken by the coal mining industry. The results of the study have potential implications for current discussions around regional development policies.