This paper provides evidence of the effect of agricultural diversification and commercialization on the health of preschool children. We specifically look at the impact of diversification and commercialization on stunting, wasting and underweight by using a nationally representative sample of households taken from the Tanzania National Panel Survey (TNPS). We find that engaging in contract farming for producing food crops has a negative effect on stunting and wasting. Diversification only has a positive effect on stunting of children at the bottom of the nutritional distribution while commercialization effects vary according to the type of crop that the household sells and the position of children in the nutritional distribution. The results provide insight into the effects of policies that pursue agricultural diversification and commercialization on the household well-being.