Households in rural area face an increasing challenge for alternative income sources tornsupplement subsistence agricultural activities. The aim of this paper was to examine therndeterminants of income diversification and its effect on rural householdsâ€™ food security usingrna cross sectional data collected from Gubalafto Woreda of North Wollo Zone, Ethiopia. Arnmulti-stage sampling technique was used to select 356 sample households. Structuredrnquestionnaire survey was under taken to obtain data pertaining to income diversification andrnits implication to food security. Additionally, key informant interview, focus group discussionrnand observation were the principal methods used to generate data. Descriptive statistics,rnordered logistic and poison regression model were used to analyze quantitative data. Thernsecondary data was used to support the analysis. The intensity of income diversification wasrncalculated using the Simpson index of diversity. Results of the econometric model indicatedrnthat access to credit, access to information, training service and distance (proximate) tornmarket were statistically significant factors at 1% and 5% probability to increase incomerndiversification. Household size, gender (being male) and access to fertilizer and improvedrnseeds were significant and have negative coefficient with 5% level of probability. The strategyrnof income diversification has significant implication on the food security status of the ruralrnfarm households in the study area. Provision of credit, training service, household access torninformation, engagement of rural households in non-farm income generating activities arernrecommending in addition to agricultural income sources.