Agricultural sustainability can only be achieved when the ends are target from the means. This does not include only safe production in terms of consciousness of future generation needs but building up the capacity of the Agricultural system towards increase in productivity cum profit maximization through the new trend of extension services. Under WTO, the globalization/liberalization of market demands farmers at all levels to transform themselves from production and selling in the domestic market to producer cum seller in the wider market scene to realize the optimum returns on their investments. The need for market led is of necessity by the paradigm shift of present Agriculture scenarios which calls for conversion of the sector into profit oriented business. FAO estimates that 32 percent of all food produced in the world were lost in 2009 due to lack of post-harvest operation among others (Lipinski, B. et al. 2013).Similarly, 13% of Gross Domestic Product was reported loss yearly in India due to loss of food grains (Manipadma Jena, 2013). Existence of many middle men has also resulted into less return on farmer’s investment as well as high cost paid by the consumer. However this loss can be minimized by the Market Led extension approach through adequate supply of information by SWOT analysis of the market, establishing market and agro processing linkages, direct marketing, and capacity building in terms of improved production and post-harvest operation such as proper handling, grading, standardizing, value addition, packaging as well as storage and transport system (Ahmad Nafees and Slathia, 2011). Hence, this paper discusses the prospects and challenges of market led extension in view of 21st century scenario for capacity building of farmers, extension functionaries’ stakeholders, and also for policy recommendation towards holistic sustainable agricultural development.