This paper assesses farmers’ incentives and conditioning factors that hinder or promote adaptation strategies and evaluates its impact on crop productivity by utilizing household level data collected in 2011 from nationally representative sample households in Malawi. We distinguish between (i) exposure to climatic disruptions, (ii) bio-physical sensitivity to such disruptions, (iii) household adaptive capacity in terms of farmers’ ability to prepare and adjust to the resulting stress, and, finally, (iv) system-level adaptive capacity that serve as enabling factors for household-level adaptation. We employ a multivariate probit (MVP) and instrumental variable technique to model farming practice selection decisions and their yield impact estimates. We find that exposure to delayed onset of rainfall and greater climate variability as represented by the coefficient of variation of rainfall and temperature is positively associated with the choice of risk-reducing agricultural practices such as tree planting, legume intercropping, and soil and water conservation (SWC); however, it reduces the use of inputs (such as inorganic fertilizer) whose risk reduction benefits are uncertain. Biophysical sensitivity of plots increases the likelihood of choice of tree planting and SWC. In terms of household adaptive capacity, we find that wealthier households are more likely to adopt both modern and sustainable land management (SLM) inputs; and are more likely to adopt SLM inputs on plots under more secure tenure. In terms of system-level adaptive capacity, results show the key role of rural institutions, social capital and supply-side constraints in governing selection decisions for all practices considered, but particularly for tree planting and both organic and inorganic fertilizer. Finally for productivity, we find that on average use of both modern and SLM practices have positive and statistically significant impact on productivity of maize. For SLM practices that also respond to exposure and sensitivity, these results provide direct evidence of their potential to aide households in adapting to further climate change. Results presented have implications for understanding and overcoming barriers to selection for each practice, distinguishing structural aspects such as exposure and sensitivity from potential interventions at the household or systemic levels linked to adaptive capacity.