This study aimed at evaluating farmers participation in the value addition to oilseeds and its implication on farmer’s income with special emphasis on sunflower. The general objective was to promote sustainable sunflower production and income generation through value addition in the rural sunflower potential areas of Tanzania. Specifically the study aimed to: assess processing capacity and utilization, identify factors influencing farmer participation in value addition, describe marketing channels of farmer value added sunflower in the market area of Tanzania, describe oil millers constraints and suggest interventions. Structured questionnaires were used to collect primary data from purposefully selected 205 respondents; 100 participating and 100 non participating farmers, and 5 oil millers from 8 villages. Discussions and participatory observations methods were also used. The results indicate that milling capacity is about 11,280kgs per day of which only about 32.3% is utilized at peak period and about 14.3% when sunflower is scarce. Most of farmers sold their sunflower products in the village. Millers were constrained by breakdown of machine, power cuts and scarcity of sunflower. The logit model was estimated using data from 200 farmers to test the hypothesis that socio-economic and institutional factors influence farmer participation in value addition to sunflower. Education and price had significant positive influences. Inadequate knowledge, formal knowledge, low income and poor market information had significant negative influences. There is a need to foster farmer’s involvement in the process of imparting knowledge. Reliable market information system countrywide which; can effectively connect producers and buyers, electricity and rural road network need to be in place.