Climate change is posing an increasingly severe challenge to agricultural livelihoods due to increased frequency and intensity of extreme weather events. Livelihood diversification can play an important role in decreasing food insecurity and vulnerability under these challenges. This paper contributes to the literature on livelihood diversification and vulnerability under climate change to assess the role of diversification as part of a Climate-Smart Agriculture strategy by analysing the determinants of diversification, income and poverty in Zambia using panel data. We specifically focus on the roles of climate shocks and institutions in shaping these linkages to highlight policy insights to improve resilience.