Farming as a source of income for rural households has failed to solely sustain livelihoods. Consequently, there has always been a need for diversification into off-farm activities and which often is not a panacea. Livelihood diversification is seen as a coping strategy for most rural households, although there is limited empirical evidence that shows if' and even why' the households diversify. Furthermore, little is known about the effect of diversification on agricultural production and household income. This study examines the factors influencing livelihood diversification and its effects on agricultural production and household income in Nyamira County, Kenya. Cross-sectional data were collected through semi-structured questionnaires involving 120 households. The first objective of the study was to assess the factors that influence the choice of different livelihood strategies in the study area; the second was to assess the effect of livelihood diversification on agricultural production while the third was to determine the contribution of off-farm income on the total household income of residents in the study area. Multi-stage sampling technique was used whereas the sample size was determined by the use of proportionate to size approach. Both descriptive and inferential statistics were used to analyse the collected data. Seven livelihood strategies adopted in the study area were identified. The most popular off-farm livelihood strategy was casual labour in the agricultural sector and the least was rents. Poisson regression results suggest that; average years of schooling of other household members, number of household members with secondary education, time taken to the water source (P=0.002), access to extension services (P=0.036), group membership (P=0.001) and electricity access (P=0.000) were the factors that influenced the number of livelihood strategies a household selected. Off-farm income accounting for about 44 percent of household income had an effect on agricultural production through the purchase of inputs used in the farm. In conclusion, both farm and off-farm sectors of the rural economy are important in sustaining livelihoods thus efforts towards enhancing both sectors should be put in place. Also, farming households in the study area need to diversify their livelihood sources to increase their cash earnings and to well utilize the existing production resources. To enhance livelihood diversification, the government, both the National and County government, should improve rural infrastructure in terms of provision of electricity and construction of tap water points near homes of people especially in hilly areas of the County.

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