The incentive for vertical integration in the presence of uncertainty is examined for the case of fixed proportions in production and a generalized effect of vertical integration is applied to other cases. The assumption that an input monopolist selling to a competitively structured downstream industry lacks incentives to integrate forward is found to apply only when risk preferences are linear or identical between stages. Divergent risk preferences between firms at the various stages of production provides additional incentive either for or against vertical integration. The welfare effects of vertical integration spawned by the incentive to accept or avoid risk are found to be positive and result in increased output of the final good and a reduced expected price. Public policy should be designed to encourage incentives to integrate. 9 references.