Financial stress and general crisis in European agriculture recently have generated a widespread interest in alternative paths of farm business development and structural adjustment. One of the options suggested by policy makers and adopted by farmers was the development of alternative farm enterprises (AFEs), in which farmers recombine resources on the farm and produce a new mix of products and services in order to supplement their incomes. In the present paper we examine the factors influencing the development of AFEs. According to empirical evidence from Etolia-Akarnania, a prefecture in western Greece that merits "less favored area" status, AFE adoption is influenced by the amount of family labor, the ratio of hired to family labor, the presence of tobacco as a main enterprise, the proximity of the farm to grade A roads, and the farmers' age. Education, management experience demonstrated by the farm manager, physical size of the farm, enterprise specialization, the use of grants, and farm location are the main factors responsible for the farmers' integration into the agro-food system.