Studying the multifunctional nature of agriculture requires a multi-level, multi-dimensional and multi-actor approach. In any given country analysis starts at the national economy level then descends to the farm and farm household level. In our study we analysed the life histories of nineteen non-representatively selected Hungarian family farms. In doing so, we determined that, to understand new initiatives undertaken by farmers, it was better to examine their motivation than merely examining the initiatives themselves. At the farm household level, multifunctionality is strongly related to achieving livelihood strategies and constitutes a possible risk management solution. The analysis has revealed farmers’ motivations for undertaking multifunctional agriculture, the interrelationship between multifunctionality and risk management, and the interpretation of multifunctional agriculture by various groups of farmers regarding their own farm activities.