This study aims at examining the general characteristics of rural micro enterprises and factorsrnthat determine the engagement of households in such activities in an area characterized by lowrnagricultural output, Konso special woreda of South Ethiopia. The study was motivated by thernbelief that rural micro enterprise employment is survival strategy of the rural households wherernthere is limited local wage employment and agriculture fails to support the growing population.rnThe study mainly used the household survey data collected through structured questionnaire tornexplore characteristics of farm economy and to describe the major characteristics of rural micrornenterprise activities. Then, the analysis was undertaken by various means of analysis andrneconomic regression for the examination of the injluencinglexplanatmy variables on household'srnincome from micro enterprise activities.rnThe study find~ that the crop production sub sector in the study sites is characterized by very lowrnproductivity. This is due to various reasons such as small and fragmented land holding,rnunsuitable soil fertil ity and land topography, lit/Ie use of high yielding inputs and lack of draftrnanimal. Above all, shortage of rainfall is the seriou problem offarm economy in the study sites.rnLivestock sector is also constrained by shortage of grazing land and water as weil as prevalencernof disease. Thus, the agricultural sector in the study sites is inadequate to support growingrnpopulation.rnConsequently, people in the study sites are involved in very small income generating activitiesrnsuch as local drinks and food preparation as well as trade which mainly used family labour orrnrelatives' and friends' labour. Their inputs are generated from the locality and mainly servernlocal people in their products. They are operated at homestead and at purt time base inrncombination with farm activities. They are perceived as somewhat profitable, labour saving, andrnreduce burden on environment and vulnerability of household to seasonal risks. As the result,rnthey are attracted by most farmers despite they are constrained by a number of impedimentsrnmainly the lack of financial capital and inputs.rnFrom the determining factors, family size, and educational status of the household's head andrnlocation of household's residence to rural weather road and periodic market shown positivernsignificance. This implies for agricultural and rural development strategies and policies to bernjlexible in such a way that they incorporate micro enterprise sector. Among the promotingrninstruments, availing necessary resources like credit, expansion of education, and strengtheningrnof rural transport sector and rural periodic markets are reasonably important.rnKey words: Rural poor, Rural micro enterprise, Risk averting mechanisms, Seasonal crop failure