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This paper examines how an industrial legacy leads to the formation of a distinct local culture and how the culture’s survival provides a context for the subsequent entrepreneurial activities in new local industries. The discussion about culture as a key driver of entrepreneurship and economic growth is well established in the academic debate. However, we know little about how culture is formed. Through a qualitative case study of two polar Swedish cities, the study highlights four key factors which are instrumental in the formation of local culture: initial conditions, characteristics of key players, network activities and composition of newcomers. We show how the local entrepreneurs responded to the underlying assumptions of the two different cultures. [ABSTRACT FROM AUTHOR]