Journal of Continuing Education and Extension 2015, Vol. 6(2): pp 951 - 969Off-farm employment can be an effective strategy to deal with uncertainty of household income associated with subsistence farming, and thus improving the welfare of households. This however depends on a households' ability to overcome barriers associated with engagement in off-farm employment. Recognizing these barriers, this paper examines the relative importance of off-farm income and investigates households' capacity and constraining factors that undermine engagement in off-fam employment. The paper is based on household survey data from a randomly selected sample of 309 households in Kilombero Valley; Tanzania. Descriptive statistics was used to examine the relative importance of off-farm income. A Logit regression model was then used to identify determinants of engagement in off off-farm employment. Findings show that off-farm income contributes more significantly towards the income of well-off households than poor households. The low level of off-farming income contribution to poor households tends to reduce income risk associated with farming. The results further show that, social capital is a key variable that influences a household's decision to engage in off-farm activities. Social trust and group membership as social capital dimensions are positively associated with engagement in off-farm employment Other statistically significant variables that explain off-farming engagement were age of the household head, credit access, education and access to tarmac road. Based on these finding, it is recommended that decision makers and scholars, who are concerned with increasing rural households' engagement in off-farm employment, should recognize the need for rural policy strategies that take into account household social capital. Such recognition will improve farmers' successful engagement in off-farm employment and hence their household income.