The use of Nature-based Solutions (NBS), designed and implemented with participatory approaches, is rapidly increasing. Much use is being made of the Living Lab (LL) concept to co-create innovative NBS with stakeholders in a certain societal and environmental, real-life context. Most of the current research revolves around urban LLs, thus overlooking specificities of rural areas. Furthermore, the influence of the context itself on co-creation processes is insufficiently recognised, leaving challenges associated with co-creation such as stakeholder engagement unresolved. By exploring the co-creation processes in the LLs of the OPERANDUM project, this study identifies eighteen contextual factors shaping the co-creation processes of NBS within rural territories and provides associated recommendations. In addition, based on lessons learnt in the OPERANDUM project, we discuss the value of a relational place-based approach in LLs, suggesting that the co-creation process should be approached as a dynamic confluence of many interconnected contextual factors. We conclude that acknowledging the interconnections in co-creation in the real-life context of rural territories may increase the success and impact of the LL approach, and ultimately, the benefits of NBS. •Better understanding of the essence and dynamics of “real life context” in the co-creation in the living labs is needed.•Real life context of a living lab is composed of factors that refer to ecological-physical, socio-economic, institutional, research and NbS context.•Co-creation of NbS in rural living labs differs from urban living labs.•Effective and inclusive co-creation for NbS requires relational and place-based approach with understanding of interrelated and dynamic contexts.