Object of research:. the processes of transformation and functioning of agricultural enterprises. Aim of research: grounding of scientific and theoretical fundamentals and practical aspects of transformation of agricultural enterprises, development of the ways of improvement of their functioning. Methods: system and structural analysis; monographic; comparative; statistic and mathematic; correlation and regressive analysis and historical one. Theoretical and practical results: theoretical and methodological basis of the carried research form the base for solving problem of agricultural enterprises functioning under conditions of economic transformation, may be used for the development and application of regional programs of rural development, aimed at increase of agricultural production effectiveness under conditions of economic transformation. Scientific novelty: for the first time: optimal parameters of prospective productive direction of agricultural enterprises of micro regions were grounded taking into account factor and result making variables, characterizing the process of transformation and achieving of them is aimed at increase of effectiveness of their farming, and directions of production intensification were specified on this basis grounding on the peculiarities of certain regions; the author improved: interpretation of notions: "transformation of agricultural enterprises", which should be understood as transfer of agricultural enterprises into new organizing and legal structures of market type taking into account area characteristics of a region; "rural development", which should be interpreted as dynamic development of territorial microsphere, providing economic progress and social welfare of rural population on the base of perfect system of territorial management; methodological approaches to calculation of integral indicator of complex social and economic development of rural region, grounding on system analysis of agricultural enterprises transformation and are territorial basis for the increase of their activity effectiveness; directions of increase of agricultural enterprises functioning, in particular diversification of agricultural production, that is aimed at the use of its own resource potential, formation of new job places, production of ecologically clean agricultural production, commercialization of economic activities in a village. the author has further developed: scientific fundamentals as to improvement of social and economic conditions of agricultural enterprises functioning, making basis for fulfillment of mechanism of their state support taking into consideration natural and economic conditions, ecological and social priorities and formation of investment attractiveness; scientific development as to grounding of mutual influence of peculiarities of rural regions on situation, specialization and functioning of agricultural enterprises, that become a base for determination of groups of administrative regions according to directions of specialization of agricultural production. Level of introduction: results of the research are accepted for practical application in the activity of Main department of agro industrial development of Lviv regional state administration, Gorodok district state administration of Lviv region; educational process of Lviv National Agrarian University; Department of development of agrarian market of the Ministry of Agrarian Policy of Ukraine, that have accepted the proposals as to activisation of financial and credit support of agricultural enterprises and were used in the development of State target program of support and development of agricultural service cooperatives for the period to 2015. Effectiveness: introduction of the research results will favor increase of effectiveness of transformation and functioning of agricultural enterprises. Sphere, branch of application: main department of agro industrial development of Lviv regional state administration, Gorodok district state administration of Lviv region; educational process of Lviv National Agrarian University; Department of development of agrarian market of the Ministry of Agrarian Policy of Ukraine.