The study was undertaken to study the nature and extent of temporal variations in the pattern of distribution of operational holdings and to examine the existing relationship between farm size and productivity of principal crops in Punjab. The study is based on data for the agricultural census years 1980-81, 1985-86, 1990-91 and 1995-96 and Gini ratios were calculated to find the inequality in distribution. The data collected by department of Agriculture, Punjab, under the scheme 'Crop-cutting experiments' were used to find the size-productivity relationship. The total number of operational holdings, in the state, increased continuously from 10.2 lakhs in 1980-81 to 11.2 lakhs during 1990-91 and then declined to 10.4 lakhs during 1995-96. The total operational area reached at 41.3 lakh hectares during 1995-96 after showing small fluctuations over the years. Due to large increase in number of operational holdings from 1980-81 to 1990-91, the average size of holding declined from 3.82 to 3.61 hectares. But it again increased to 3.9 hectares during 1995-96 owing to the decline in total number of holdings. The proportion of the number of marginal holdings in the state declined abruptly during 1995-96 after continuous increase from 1980-81 to 1990-91. The opposite trend was observed in case of other size holdings. The decline in proportion of marginal holdings during nineties might be due to the migration of marginal farmers to other areas as further improvements in their meager farm incomes due to highly intensive use of natural resources of land and water having already been exhausted by 1990-91. In most of the districts, there was an increased marginalisation of land holdings from 1980-81 to 1990-91. Slightly different results were obtained in the Amritsar and Patiala districts during the same period. However, during the period 1990-91 to 1995-96, the proportion of marginal holdings declined in all the districts. In most of the districts the proportion of large holdings has gone up from 1990-91 to 1995-96 except in Gurdaspur, Amritsar, Kapurthala and Ropar districts. After an increase till 1985-86, the inequality in the distribution of operational land holdings in the Punjab state narrowed down. The relationship between the Gini concentration coefficient and productivity indicates the decline in productivity with the increase in concentration coefficient, it being an indicative trend only because the correlation coefficient was negative but not significant. However, the same has not been observed in case of Kapurthala, Ludhiana and Bathinda districs which might be due to the non-significant relation between productivity and inequality in land distribution. The productivity of paddy was almost size neutral. There was no significant relationship between farm size and productivity of wheat in zone II and III. However, the relationship changed from non-significant to positive and significant in zone I. The relationship between farm size and productivity of maize was significant and positive. There was no significant relationship between farm size and productivity of cotton indicating no specific productivity advantage to any farm size group. It was only in case of sugarcane crop that relationship turned out to be non-significant from positive and significant level in zone II over the study period. It might be due to better dissemination of production technology and expertise to the small sized farms over the period. Thus, in Punjab state the era of negative relationship between farm size and productivity is ending leading to the size neutrality of productivity or the positive and significant relationship. It may be due to widespread diffusion of technology among all the classes of farmers, irrespective of their farm size. The nature of emerging relationship signifies the need of economically viable sized farms. The study suggests the need to increase the operational farm size owing to the trend towards a positive relationship between farm size and productivity. As the capital (machine) investment on Punjab farms have been increasing in order to capitalize on increasing the cropping intensity and improve upon the gains from the timeliness of farm operations, the need for more viable farm sizes intensifies. The small and marginal farmers were even not able to generate income, sufficient to keep them above the poverty line. This has become even more constraining due to little scope left for further intensive use of land and water resources. The relatively large operational farms facilitate the capital formation, opening the way for further improvement in the agricultural sector. Study suggested the need to generate sufficient income and employment opportunities for small and marginal farmers in the non-agricultural sector so that their movement, away from farming, may be facilitated. The objective of large operational farm size can be achieved by changing the land tenancy laws to provide security of ownership encouraging the small/marginal farmers to lease out their land (and revert back if need be without any legal hurdles). Secondly, the ceiling on the operational holdings, being flouted more conveniently need to be abolished which would help in streamlining the process of capital formation, resource use efficiency and more productive farming.