This paper examines the relationship between farm size and yield per acre in rural Turkey. The literature on the inverse-size yield relationship is reviewed, and a framework is provided that explains the inverse relationship based on rural factor markets imperfections in the markets for land, and labor. The hypotheses are tested on recent farm-level data from rural Turkey in 2002. A strong inverse-size relationship between farm size and yield is prevalent in all seven regions of Turkey even though heterogeneity among households and regions is considered. The findings in this paper provide evidence in favor of labor-centered theories explaining inverse size yield relationship, and calls for a reconsideration of market friendly agrarian reforms in developing countries for sustainable development based on technical and allocative efficiency and equity.