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Participation has become a widely used concept and covers a great range of political and social practices. This article describes and analyzes some aspects of the Participatory Budget in the State of Rio Grande do Sul (Brazil) in the period 1999–2002, representing the first attempt to implement this process on a larger geographical scale. The paper is developed around three foci. First, the experience of direct popular participation is situated in the context of the grassroots social movement that has developed over recent decades in Brazil. Then there is a presentation of the basic contours of the discussion and preparation of the state budget in Rio Grande do Sul. Finally, some of its effects are pointed out in terms of the political structure, regional development and pedagogical construction.