The present study investigated the determinants of off-farm employment among small farmers in Peshawar Valley of Khyber Pakhtunkhwa i. A sample of 298 farm households was selected using random sampling technique and data were collected through a pre-tested interview schedule. This study focuses on three selected districts i.e. Peshawar, Charsadda and Mardan. Six villages were selected two each from the sampled districts. Analysis showed that the coefficients of household size, level of education of the household head, age of the household head, farm underemployment, income from off-farm employment, access to credit were positively related to the off-farm employment. While farm area operated and income from farm output was negatively but significantly related to off-farm employment. There was a significant difference in the off-farm employment among various sizes of farms. In a similar manner it was also seen that the tenants and owner-cum-tenant were involved less in off-farm activities than owners. It was established that owners operated very small farm size of the study area. There was a significant difference among off-farm employment level in the three districts. More of the sampled respondents were involved in off-farm employment in Peshawar followed by Mardan and Charsadda. Similarly small farmers of developed villages perform more off-farm employment than the small farm households of underdeveloped villages. This could be associated to the developed means of transport and communications, better education facilities, market facilities as well as availability of off-farm jobs locally. In developed villages of three districts, average per month income of small farm households from farm output was higher than the undeveloped villages of these districts due to the high sale price of vegetables grown on large area and more milk production. Similarly, in developed villages income from off-farm employment was more than undeveloped villages. Because large number of family labors of small farm households were working on high paid jobs or employed else or self-employed and thus contributed a good amount to their family’s income. The study suggests that with the lessening in the size of land holding unemployment in the agriculture area is probably going to increment. There is a need to make off-farm employment opportunities. Agro based industries appears to potential area to create employment opportunities. All the while there is a need for initiating skill development programs.