Agricultural mechanization service enterprises, both legal and real persons, involve a group of agricultural machinery and equipment providing services in the process of production in a specific geographical area. Considering the enterprises capabilities in the management of production services and in order to achieve the developmental purposes, this survey study was conducted in Isfahan Province in Iran. The study was specifically aimed to determine the factors affecting productivity of agricultural mechanization service enterprises. The pilot study was done in 2008 and in 2009 and the field survey was conducted using an interview technique. A constructed questionnaire with calculated Cronbach Alpha coefficient of 0.854 was used to interview two groups, the first comprising managers of agricultural mechanization service enterprises and the second group comprising farmers receiving the enterprises’ services. Because of recent drought specifically in central parts of Iran, of 72 active enterprises in 5 townships of Isfahan Province only 15 had remained operational, all of which were included in the survey conducted. Of all those farmers using services in the last year, 116 were randomly selected and interviewed. There are different ways to measure the productivity on the basis of the definitions of this concept. In many studies, due to easy measurement of efficiency index, that is the proportion of output to input, this way has been followed to measure productivity. Efficiency, in fact, refers to the right way to do something, while productivity deals with this but, with the additional requirement that the products or services be needed and the obtained results be fair and produced and distributed very well. In other words, a good efficiency is tantamount to productivity. Effectiveness is the extent to which the predetermined goals have been realized in any organization. More simply, we can identify effectiveness with the correct determination and realization of goals. Therefore, efficiency index represents effectiveness in a given organization. Results indicated that from among a list of inter-organizational factors, managers’ personal characteristics, their leadership styles and technical traits of machinery operators displayed the greatest impact on the productivity of agricultural mechanization service enterprises. Intra-organizational factors including farmers’ personal characteristics, farm characteristics, governmental policies, and upstream and downstream related services to agricultural mechanization had the greatest effect on the productivity of service enterprises. Analysis of rural development impact of these service enterprises indicated that agricultural machinery rental costs have been reasonably modified and small farmers' access to the farm machinery for their production practices has increased. Furthermore, the findings showed that innovation in rural