This study investigates the driving factors that influence farmers’ decisions to adopt modern agricultural inputs (MAI) and how this affects farm household welfare in rural Rwanda. To account for heterogeneity in the MAI adoption decision and unobservable farm and household attributes, we estimate an endogenous switching regression (ESR) model. The findings reveal that size of land endowment, access to farm credit and awareness of farm advisory services are the main driving forces behind MAI adoption.