Since the 1960s, Australian universities have come to be regarded as important enablers, even drivers, of regional development. This has been accompanied by the renewal of their third mission in regional engagement. Theorization of this development has neglected the individual level of analysis, tending to focus on the institutional level. This article draws on interviews with academic staff and managers in four Australian regional universities to discuss some of the dilemmas faced by academics and managers as they seek to make sense of regional engagement. These are labelled institutional, policy and individual identity dilemmas. These experiences carry implications for the management of engagement initiatives in universities and for policy-makers who seek to foster stronger links between regional universities and their proximate spaces.