Management of crop diversity for improved agroecosystem functioning can provide economic co-benefits to farmers. Yet, there remain critical gaps in understanding how farm management practices evolve through agroecological transitions and how agroecological practices affect socioeconomic outcomes such as income and working conditions. We conducted a case study of farms transitioning from conventional tobacco production to diversified agroecological management in a participatory certification network in southern Brazil. We purposively sampled farms along a transition gradient and conducted crop diversity and management surveys and semi-structured, in-depth interviews with household members. Using these data, we assessed indicators of ecological management, income, and working conditions across three transition stages—conventional, transitioning, and agroecological. We found that ecological management indicators increased in magnitude and evenness by transition stage, as transitioning farmers increasingly used practices to support ecological complexity. Agroecological farmers utilized system redesign, a transformative approach to agroecosystem management, rather than efficiency-based or substitution-oriented practices adopted by conventional and transitioning farmers. While farms in transition reported more difficult working conditions and lower incomes, agroecological farmers had similar per capita working hours and improved work quality and occupational safety relative to conventional farmers in the region. On a per capita basis, experienced agroecological farmers earned similar net agricultural incomes and higher net household incomes than conventional farmers, by reducing agricultural expenses and diversifying their markets and livelihoods. Our study is the first to our knowledge to use a transition gradient approach to examine how agroecological transition stage affects both ecological and socioeconomic indicators on farms, providing insights into the processes and pathways by which farmers overcome challenges during transitions. Results highlight the potential for stable profits and improved working conditions on farms following agroecological transitions, within a supportive policy and market context.