The intensification of Mediterranean farming systems has adversely affected the environment. As a result, climate change, soil and land degradation, and biodiversity loss have been exacerbated. A potential solution for addressing these challenges and enhancing farm sustainability is diversification, such as implementing agroforestry systems. Specific indicators are commonly used to evaluate the potential of diversification practices. However, agreement on a common set of assessment indicators is rarely reached. Moreover, the different biophysical and socio-economic conditions between regions make it difficult to adopt practices based on standardized assessments. This study aims at developing a practical methodology to assess the sustainability of Mediterranean agroforestry systems, using a three-dimensional evaluation concept for agro-environmental, economic and social performances. The steps in this study were, (i) define a set of relevant indicators and selection criteria, (ii) validate and select indicators through a participatory approach and (iii) apply the indicators to assess the performance of olive-wild asparagus agroforestry systems in central Italy. Expert opinions and stakeholders’ participation were found to play an important role in identifying relevant indicators for assessing farming systems. The results showed that intercropping wild asparagus within olive orchards provides agro-environmental benefits and economic profitability, but also causes a higher workload. With a land equivalent ratio above one, the agroforestry system is more productive and results in a 50% higher income than olive sole cropping. With similar management practices, both systems had a comparable energy use efficiency and pesticide load index value. However, the annual workload, during the full production phase, increases by 75% in the agroforestry system mainly due to manual labor required for asparagus harvest. Furthermore, the agroforestry system had better economic resilience (positive net present value) in the face of drops in crop prices and rising production costs by up to 15%, whereas olive sole cropping generated negative net present value if costs increased by 10% or prices fell by 5%.