This study aimed at assessing the level of livelihood diversification and its determinants in the Uttarakhand hills using the Simpson diversification index and a multiple linear regression model from the data obtained from 200 sample farmers chosen through a multistage random sampling technique. The results indicated that there was 100 per cent engagement of households in agricultural activities, yet the proportion of average income derived from them was only 4.78 per cent. The value of the diversification index indicated that about 19 per cent of the sample households belonged to low, 49.50 per cent to moderate, and 31.50 per cent of households belonged to a high level of livelihood diversification. Further, the results of the multivariate regression equation indicated that household structure, dependency ratio, education of household, organisation membership, and training had positive effects, while age of household head and farm size showed negative effects on livelihood diversification. As the soil and topography in the state are not suitable for mono-cropping, mixed agricultural practises need to be adopted. Small scale industries, cottage industries, and tourism should be developed and have diverse skill development training programmes.