The purpose of this paper is to investigate the material and human resources available and future prospects for entrepreneurship development in hilly areas of Jammu and Kashmir state. Quantitative and qualitative data were collected through a survey of 315 common households; 160 entrepreneurs and from 21 villages of Doda region (Patwaris, Namberdars,Chowkidars and other revenue officials) to make the study fully representative. Results show that J&K state has huge material as well as human resources but less effort has been made to harness such resources. Moreover, the financial resources available from banking and other financial institutions have not been utilized fully for the purpose. Factors such as lack of education and awareness, cost of exploration of resources and lack of initiative from the government are responsible for lesser growth of entrepreneurship in the area. Research further establishes that proper effort needs be done to promote entrepreneurial activity in the hilly areas of the state.