Abstract: The objective of this paper is to empirically examine the relation between growth and human capital for the Greek regions (NUTS III), for the period 1981-2003. We use the enrolment rates at lower and upper secondary education and the respective student/teacher ratios. Moreover, taking a broader view of human capital, we include two health care indicators (the number of medical doctors and hospital beds). We find that student enrolment rates at both levels of secondary education have a positive impact on growth, while a higher student-teacher ratio inhibits growth. Also, the number of medical doctors seems to boost growth. Besides, there are important human capital externalities across neighbouring regions. We define two regional groups (high and low income) and there is strong evidence of heterogeneity in rates of return to human capital. The above results are more robust for high income regions. Overall, this study incorporates the differences in rates of return to education between regional clubs. We believe that our findings have important policy implications and Greek authorities should take them into account in designing growth promoting policies at the national and regional level.