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Agriculture is an essential instrument for development, poverty alleviation, and food security in developing countries, such as Iran. The agricultural sector of Iran is dominated by small-scale farming, and the yield of most crops is low. A well-designed and well-functioning agricultural extension system can facilitate the transition toward productive, profitable, and sustainable agriculture. However, the top- down agricultural extension system of Iran has left most smallholder and resource-poor farmers with no access to advisory services, and their problems have remained unresolved. The new agricultural extension system (NAES) was initiated in 2014 to better respond to the problems of smallholder farmers. However, there is still no definite reflection on the influences of the NAES on agricultural development. Therefore, this study aimed to evaluate the performance of the NAES. Also, it purposed to identify the blocking mechanisms hindering the NAES’ function. In this regard, qualitative research was planned and conducted in Fars Province, Southern Iran. The findings revealed that NAES has managed to enhance the availability of extension services for smallholder farmers, improve the productivity and profitability of agriculture, and reduce livelihood vulnerability. However, it has failed in facilitating access to remunerative markets, mobilizing sustainable financial and human resources, and being entirely demand-driven because of financial, physical, institutional, market, natural, informational, capability, and psychological constraints. Some recommendations and implications are offered to improve the effectiveness of the NAES. [ABSTRACT FROM AUTHOR]