The process of agricultural restructuring in Europe has been strongly influenced both by CAP support of multifunctional agriculture and by market liberalisation, and farmers are exhorted to become more entrepreneurial in response. This paper explores the interaction of these policy goals in two regions where a rural development form of multifunctionality is favoured. Farmers' entrepreneurial skills are used as an organising framework, and relate farm development to both farm and farmer-specific factors as well as to their institutional, cultural, social and economic contexts. The study of entrepreneurial skills is related to how multifunctional agriculture is expressed at farm-level and how farm businesses may respond to rural development initiatives. The framework highlights dynamic and highly contingent responses and brings the roles, identities and the framing of farmers into focus, offering a means by which farmer advice and support may be tailored to farmer circumstances. (Contains 5 tables and 3 figures.)