Healthcare systems have a vested interest in employing work-ready graduates. The challenge for universities is to find ways to provide workplace learning that incorporates student education and high quality patient care. Inland areas of Australia, similar to other rural locations globally, experience additional challenges including a relatively high incidence of ill health, increasing demand for health services, chronic workforce shortages and ageing of the existing rural health workforce. In this paper, we conceptualise and describe the research findings related to context from a consultative enquiry into university clinics conducted in 2008. Interview participants were drawn from twenty university clinics in Australia and New Zealand. A consistent theme throughout the interviews was tensions that arose between the role of education and healthcare provision within university clinics. Many interview participants described ways they managed these tensions to meet the expectations of students, educators and the community. The patient supply is the most critical factor in the context of university clinic operations. It is vital to both the educator and the healthcare provider roles. In inland areas with sparse populations a number of strategies, such as outreach clinics, hospital or health centre- based clinics and multi-disciplinary sites, will have to be developed if university clinics are to operate effectively for students and patients.