It is observed that livelihood studies require spatial conception of households. Unfortunately, this has not been pursued by many scholars. Available studies focus extensively on rural areas and some other focus on urban livelihoods in isolation without analyses that would provide an integrated view of livelihood. This study uses national survey data to undertake an analysis of livelihoods and the determinants of livelihood diversification in Ghana by introducing spatial factors in the asset framework. We observe that livelihoods and diversification are determined by socio-economic factors, characteristics of the main livelihood activity as well as spatial factors. Our study suggests that diversification as a norm is low in probability when we study livelihood across rural and urban areas and with aggregated livelihood strategies. Apart from the contribution this study makes in understanding spatial determinants of diversification, we argue that spatial factors could account for the difference in living standards and development programmes and policies should take this into consideration. We recommend that the analysis of the assets framework, which includes the spatial contexts of beneficiaries, should precede livelihood interventions.