There is an increasing awareness that diversification plays a strategic role in rural livelihood systems. The principal question to be addressed in this paper pertains to the conditions and the ways in which rural households diversify their livelihood activities and strategies. To answer this question empirical evidence will be reviewed. Specific attention will be paid to perspectives that may shed new light on the issue of rural livelihood diversification: a gender perspective, a temporal perspective, and the 'HIV/AIDS lens'. In the paper, the livelihood system is seen as an open system, interfacing with other systems and using various resources and assets to produce livelihood, with the household as the locus of livelihood generation. Diversification is defined as the process by which households construct increasingly. diverse livelihood portfolios, making use, of. increasingly diverse combinations of resources and assets. (C) 2004 Elsevier Ltd. All rights reserved.