The nature and extent of crop diversification in the Karnataka state has been analyzed by collecting secondary data for a period of 26 years from 1982-83 to 2007-08. Composite Entropy Index (CEI) and multiple linear regression analysis have been used to analyze the nature and extent of crop diversification in the state. The CEI for different crop groups has shown that almost all the crop groups have higher crop diversification index during post-WTO (1995-96 to 2007-08) than during pre-WTO (1982-83 to 1994-95) period, except for oilseeds and vegetable crops. There has been a vast increase in diversification of commercial crops after WTO. Crop diversification is influenced by a number of infrastructural and technological factors. The results have revealed that crop diversification influences production. The study has suggested that the creation of basic infrastructural facilities like sustained supply of irrigation water, markets, fertilizer availability, proper roads and transportation is an essential pre-requisite for creating enabling conditions for fostering the process of agricultural development and crop diversification, as most of these parameters are found to influence the nature and extent of crop diversification.