Innovation in family farming analyses family farms and the role of innovation in ensuring global food security, poverty reduction and environmental sustainability. It argues that family farms must be supported to innovate in ways that promote sustainable intensification of production and improvements in rural livelihoods. Innovation is a process through which farmers improve their production and farm management practices. This may involve planting new crop varieties, combining traditional practices with new scientific knowledge, applying new integrated production and post-harvest practices or engaging with markets in new, more rewarding ways. But innovation requires more than action by farmers alone. The public sector – working with the private sector, civil society and farmers and their organizations – must create an innovation system that links these various actors, fosters the capacity of farmers and provides incentives for them to innovate. Family farms are very diverse in terms of size, access to markets and household characteristics, so they have different needs from an innovation system. Their livelihoods are often complex, combining multiple natural-resource-based activities, such as raising crops and animals, fishing, and collecting forest products, as well as off-farm activities, including agricultural and non-agricultural enterprises and employment. Family farms depend on family members for management decisions and most of their workforce, so innovation involves gender and intergenerational considerations. Policies will be more effective if they are tailored to the specific circumstances of different types of farming households within their institutional and agro-ecological settings. Inclusive research systems, advisory services, producer organizations and cooperatives, as well as market institutions are essential. The challenges of designing an innovation system for the twenty-first century are more complex than those faced at the time of the Green Revolution. The institutional framework is different due to a declining role of the public sector in agricultural innovation and the entry of new actors, such as private research companies and advisory services, as well as civil society organizations. At the same time, farmers are having to address globalization, increasingly complex value chains, pressures on natural resources, and climate change.