This study explores livelihood diversification, income sources, and interconnections in the agricultural-centric mountain ecosystem of Kalpa Tehsil. Using mixed methods, income data from six villages was analyzed, along with correlation analysis and the Simpson Diversification Index. Agriculture emerged as the primary income source, followed by Non-Farm Income, Remittances, and Other Income. Correlation analysis highlighted strong associations, particularly with Agriculture Income. The Simpson Index revealed medium-level diversification dominance, followed by low and high levels. Qualitative data from interviews and observations provided socio-economic and environmental insights. The study emphasizes the need for diversified livelihood strategies to enhance resilience and sustainability. Policymakers should promote varied income sources and sustainable practices. Findings are specific to Kalpa Tehsil but hold relevance for similar mountain ecosystems. Future research should focus on tailored interventions for such regions.