ABSTRACT The rapidly growing global population, projected to increase by 50% by 2050, coupled with climate change, necessitates a sustainable transformation of agricultural systems to ensure food security. In dryland ecosystems, it shows an aridity index of < 0.65, supports extensive livestock grazing and sustains ~38% of the global population, including rapidly growing regions. Despite arid conditions, they host ~35% of global biodiversity, featuring uniquely adapted species. Drylands also play a crucial role in the global economy, providing food, medicinal plants, and essential ecosystem services like climate and erosion regulation. While India has achieved self‐sufficiency in food grain production, the challenges of food security and sustainable development are particularly acute in dryland areas, where harsh climatic conditions, water scarcity, and degraded soils significantly hinder agricultural productivity. This review explores crop diversification as a sustainable strategy to address these challenges, highlighting its potential to improve soil health and increase crop productivity. Crop diversification is an attempt to include temporal and spatial alternation in cropping systems to enhance productivity, sustainability, and maintain the ecological balance. It is recognized as one of the most feasible, cost‐effective, and rational ways of developing the resilience of crop productivity to the changing climate. Diversified cropping systems include practices such as crop rotation and intercropping with cover crops, such as legumes, grasses, and brassicas, which are planted during fallow periods to protect the soil from erosion, improve soil structure, fix atmospheric nitrogen, and also enhance soil microbial activity, which is essential for nutrient cycling and overall soil health. Despite its benefits, several constraints hinder the widespread adoption of crop diversification, including inadequate infrastructure, lack of knowledge and training, and the dominance of monoculture systems. This review underscores the need for systematic research and supportive policies to promote diversified cropping systems, particularly in dryland regions, to achieve sustainable agricultural productivity and food security.