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The promotion of agroforestry as a mitigation practice requires an understanding of the economic benefits and its acceptability to farmers. This work examines the agroecological and socio-economic factors that condition profitability and acceptance of agroforestry by smallholder farmers in Western Kenya. We differentiate the use of trees according to the permanence of carbon sequestration, introducing a distinction between practices with high mitigation benefits (timber) and practices with low mitigation benefits (fuelwood). This study goes beyond the analysis of incentives to plant trees to identify incentives to plant trees that lead to high mitigation outcomes. We show that environmental factors shaping the production system largely drive the choice for planting trees with high mitigation benefits. Most trees in the area are used for fuelwood, and the charcoal economy outweighs economic factors influencing planting of trees with high mitigation benefits. Larger households tend to produce more fuelwood, while high mitigation uses are positively related to the education level of the household head, and to the belief that trees play a positive role for the environment. Where trees contribute significantly to incomes, the norm is that they are owned by men. We conclude that although agroforestry is not perceived to be more profitable than traditional agricultural practices, it plays an important economic and environmental role by supporting subsistence through provision of fuelwood and could relieve pressure upon common forest resources. In areas with high tree cover, it also represents a way of storing capital to deal with risks and cope with uncertainty.