During the last decade 80% of municipalities in Pest county recorded population growth – of which a significant part is as a result of people moving out from Budapest (KSH, 2009). Accordingly, areas in the vicinity of Budapest face high levels of urban sprawl. This has significantly contributed to the transition of farm systems in this periurban area, which in the Hungarian post communism context was and still is a challenging issue and has led to several socio-economic and environmental problems. Based on an in-depth analysis of the transformations of the agricultural production system and its environment (markets, institutions, policies and social changes) in the LAU13 area of Veresegyház, this paper identifies the conditions required to develop and maintain farm systems in periurban areas in a sustainable fashion.