This paper1 investigates the determinants and impact of agroforestry for smallholders in rural Tanzania. Two questions are addressed: (1) Do these factors drive farmers to grow trees? (2) To what extent does tree cultivation contribute to income generation of households? The empirical results show households with higher environmental awareness, property rights, and less yield losses cultivate more trees per acre. Also the future evaluation plays an important significant role. Here, suitable measures to increase future expectations and environmental awareness need to be developed to increase tree cultivation. However, the impact assessment shows that only trees up to a certain income level influence income positively. For more prosperous households other income sources such as cash crop production play a more important role; here trees per acre influence the income per capita negatively. This leads to the conclusion that trees may be more important for the poorer households compared to the more prosperous ones.