It is a challenge for a farmer with limited resources to decide on the production of commodities and investment in the farm. Transformation of smallholder subsistence agriculture, to market oriented value addition based agriculture is vital for poverty reduction in Ethiopia. This study was initiated to explore the factors which contribute for the adoption of improved wheat and pepper varieties and intensification of the farm in Bure district, Ethiopia. The study took a random sample of 200 households using two stage sampling procedure with a probability proportional to size technique. Descriptive statistics and econometric statistical tools were used for analyzing the data and answering research questions. Different demographic, social, economic and access to institutional support service variables which are theoretically supported to influence the adoption and use of improved technologies and intensification of the farm were used for the logit and multiple linear regression model respectively. Resource endowments of the farm household, institutional factors and socio-economic factors are found to be vital in the decision making for intensification and adoption of improved varieties. It is found that different institutional support services in the rural economy have had significant role to enhance the uptake of technologies and intensification of smallholder agriculture. [H. Yesigat. Transformation in smallholder agriculture through intensification in Ethiopia: determinants and implications. International Journal of Agricultural Science, Research and Technology, 2012; 2(3):123-128].