This article reviews the recent literature on diversification as a liveliho
od strategy of rural households in developing countries, with particular re
ference to sub-Saharan Africa. Livelihood diversification is defined as the
process by which rural families construct a diverse portfolio of activitie
s and social support capabilities in order to survive and to improve their
standards of living. The determinants and effects of diversification in the
areas of poverty income distribution, farm output and gender ar-e examined
. Some policy inferences are summarised. The conclusion is reached that rem
oval of constraints to, and expansion of opportunities for diversification
are desirable policy objectives because they give individuals and household
s more capabilities to improve livelihood security and to raise living stan
dards.