The continuity of farming in mountain areas in Europe is at severe risk and its future faces manifold uncertainties. Mountain farms are immersed in a long-term process of reorganization. Farm diversification plays a prominent role in this process of adjustment and reallocation. However, little work has been done explicitly on the role farm diversification plays in the current structural changes occurring. In order to fill this void, the nature of farm diversification has been examined in the Pyrenees, where four different typologies of farms have been identified: absence of diversification, agricultural diversification, farmland diversification and finally farm labor diversification. These typologies reflect a gradation along which the farm diversification practices are applied to more aspects of the farm household. Throughout this gradation farming is increasingly marginalized. Finally, it is argued that the endorsement of policy measures stimulating farm diversification in mountain regions should be cautiously considered, since there is high risk of encouraging further agricultural abandonment.