The study utilises the integrated household panel data to identify agricultural diversification strategies in Malawi, assess how household welfare varies with agricultural diversification strategies, and identify the factors associated with household participation in the various agricultural diversification strategies. Data shows a growing trend in diversification between 2019 and 2024. While Maize production remains dominant, there is a decline in the share of households growing Tobacco, with households shifting towards legumes, especially Soybeans. Furthermore, the share of households engaged in livestock production has increased, particularly chickens, goats, and sheep. Data also reveals a strong emergence and prevalence of integrated crop-livestock farming. Diversification strategies involving "Tobacco and Livestock" significantly improve household income and dietary diversity. For dietary diversity, the most impactful diversification strategies are "Cereals and Livestock", "Legumes and Livestock", "Tobacco and Livestock" and "Horticulture and Livestock." The results also show that crop and livestock integration demonstrates a strong potential to simultaneously improve income and nutritional outcomes. Overall, the study finds that agricultural diversification is positively associated with household percapita income and household dietary diversity. Household participation in agricultural diversification is positively associated with factors such as household head age, asset ownership, land ownership, and access to extension and credit. The study recommends that the government should promote integrated crop-livestock production as a strategy for enhancing household dietary diversity and income while also improving access to productive agricultural assets, land, extension services, and credit services to increase household participation in agricultural diversification.