Globally, due to rapid population growth and continual urban sprawl, average arable land per household is shrinking hence crop diversification is gaining increased importance in the quest for solutions to the perennial food security problems in most of Sub-Saharan countries. This study sought to examine the relationship between crop diversity and costs of farming among the farmers. A cross-sectional descriptive research design was adopted for the study. The target population for the study was small holder farmers with a total population of 26,617, from which a representative sample of 384 participants was drawn using Simple random sampling. Data was generated through secondary and primary data; primary data was collected through designed and administration of questionnaires. Hypothesis were generated and tested. Data was analysed using both descriptive (means, standard deviation, frequencies and percentages) and inferential statistics (simple linear regression analysis). All the tests of significance were conducted at α=0.05. The study revealed that crop diversification reduces the labour costs among the small holder farmers in the region, that is; an increase in crop diversification lead to a drop in the total cost of farming among the small holder farmers in Bungoma South Sub-county by 67.2% (as indicated by Standardized Beta coefficient = 0.672). The results are indicative of the importance of crop diversification as ecologically feasible, cost- effective and climate smart agriculture practice in rural smallholder farming systems. Therefore, we recommend wider adoption of diversified cropping systems notably those currently less diversified for resilient and affordable agricultural practise.