Abstract: With the importance of innovation and knowledge receiving increased recognition by governments in Australia, many cities have developed strategies and implemented programs to improve their ‘innovative milieus’ and to attract ‘creative people’ in order to aid the restructuring and growth of their economies, especially in the context of metropolitan development. This paper extends the current research and policy inquiry to small regional cities, using Bendigo, Victoria as a case study. The research examines the factors effecting the attraction and retention of creative people and creative businesses in Bendigo, based on analysis of data collected from ABS statistics, government reports, and key informant interviews. The findings reveal that the attraction of creative people and creative businesses is a complex process. Affordability and liveability stood out as the primary drivers of attraction, supported by specific qualities of community and place. Small regional cities exhibit unique inherent characteristics that can attract creative people. It is a key task for the governments to leverage such characteristics in their policy planning.