In this paper we analyze the impact of the Integrated Household Extension Program (IHEP) in the Tigray region in northern Ethiopia. The government of Ethiopia – in contrast to the majority of countries in Sub-Saharan Africa – invests heavily in agricultural extension but very little empirical evidence is available on the impact of public extension services on farm performance and household welfare that could justify these investments. The IHEP program is a particularly interesting case as it is an example for how agricultural extension systems in developing countries changed during the past two decades, from centralized top-down technology-transfer-orientated approaches to decentralized, participatory and more integrated approaches. We empirically assess the impact of participation in the IHEP program on household income, investment and income diversification. We use household survey data from 730 farm-households in the Tigray region and propensity score matching methods to estimate the impact. We find that the extension program had a large positive impact on household welfare – increasing income with about 10 percent – and on investment and income diversification.