Based on a survey of 48 communities in central Honduras, this paper identifies the major pathways of development that have been occurring in central Honduras since the mid-1970s, their causes and implications for agricultural productivity, natural resource sustainability, and poverty. Six pathways of development were identified: 1) basic grains expansion communities—where basic grains production is the dominant activity and increased basic grains production has occurred; 2) basic grains stagnation communities—where basic grains production is dominant but has stagnated or declined; 3) coffee expansion communities—where coffee production is important and has been increasing in importance; 4) horticultural expansion communities—where substantial adoption and expansion of horticultural crops has occurred; 5) forestry specialization communities—where forestry activities are important and basic grains production is stagnant or declining; and 6) nonfarm employment communities—where nonfarm employment is a major and increasing source of income. The pathways were distinguished by factors determining comparative advantage, including agricultural potential, population density, and access to markets and technology. Changes in agriculture and resource management differ significantly among these pathways, though poverty was found to decline to a similar extent across all pathways. It appears that the key causes of change in productivity and resource management are different and more pathway-dependent than the key causes of change in poverty, which depends to a great extent on provision of public services. Basic infrastructure and public services are badly needed throughout most of central Honduras, while efforts to address sustainable agricultural development may not be sufficient to solve poverty problems. There may not be large tradeoffs between achieving more sustainable development and reducing poverty, since the causes are different. The findings also imply that a “one-size-fits-all” approach to technical assistance is unlikely to be successful, since different approaches show promise in different pathways.