This paper analyses structural changes in agriculture in the Škofja Loka’s region in Slovenia based on the empirical analysis of the income diversification in the sample of agricultural households (AHs) in 2001 and 2006. The focus of the analysis is on the entire sample of AHs, by socio-economic types of AHs and by the areas with different levels of economic development and by different stages of less favoured areas for agricultural production. The numbers of households, which are professionally engaged in the farming activities, has dropped. In turn, the number of AHs, which are abandoning the farming activities, has risen. The structural changes in agriculture and AHs differ between the differently defined areas. The household’s income derived from agriculture is insufficient to sustain and to survive for most of the AHs, making the household’s income diversification inevitable. The development strategies of the AHs are unclear. The AHs are abandoning the farming due to uneconomical production and better employment opportunities in non-agricultural activities.