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More than a decade ago the Uganda Government embarked on a number of policy and institutional reforms in the Agricultural sector which included trade liberalization, deregulation of the domestic market for inputs and outputs, physical rehabilitation of processing plants and unified extension systems. Despite the reported remarkable progress in the liberalization of markets, there is very little empirical evidence on the effect of these policies on Supply Response and Price Volatility of agricultural commodities. This research examined the impact of liberalization on selected agricultural commodities. Its objectives were; to characterise the production and exports of key agricultural commodities in Uganda from 1970- 2005, to determine the effect of trade liberalization on supply response and price volatility of key agricultural commodities and finally to determine the effect of agricultural commodity price volatility on crop production and Gross Domestic Product.Descriptive statistics and econometric methods were used to achieve the objectives.