Trade liberalization affects various economic variables and sectors especially employment in developing countries. Agricultural sector has a considerable share in total employment in Iran. Therefore, identifying factors affecting employment in agricultural sector seems to be a necessity. With respect to the importance of this issue, present study has investigated the effect of trade liberalization on the Iranian agricultural employment. Hence, labor demand function in agricultural sector was estimated for the period of 1971-2007. Using Johanson-Joselius and Error-Correction models, the long term and short term relations among the variables were estimated. Based on these findings, trade liberalization has had a negative impact on the employment of Iranian agricultural sector both in log and short term. On this basis, policymakers should minimize negative effects of trade liberalization on the employment of Iranian agricultural sector through development of new industries in rural areas.