The purpose of the article is to reveal methodological principles of institutional formalization of family farms, to define institutional contours for establishing mechanism of economic status of a subject “family farm” taking into account the national institutional and legal basis and the foreign experience for institutionalizing the farm structure. Research methods. The research basis are the theoretical foundations of the institutional analysis of economic processes and phenomena, the methodology of interdisciplinary synthesis of methodical components of the institutional and classical economic theory, namely: from the institutional theory for prioritization has been determined the comparative method (for generalization of the institutional foundations for formalization of family farms); from an economic point of view authors have highlighted the method of systematic and structural analysis (for analytical assessment and structuring of institutional and organizational priorities for formalization of family farms in the system of organized market taking into account foreign experience and development trends of the domestic agrarian sector). Research results. Methodical principles for institutional formalization of family farms, development of institutional contours for formation of a mechanism for an establishment of the economic status of “family farm” have been proposed, taking into account the national institutional and legal basis and the foreign experience for institutionalization of the farm structure. Elements of scientific novelty. Methodical conception of an institutional beginning of formalization of business entities in the agrarian sector has gained further development. It consists from principles’ defining, harmonizing of criteria, defining status of family farm as a form of management in accordance with the norms of Ukrainian legislation and the foreign experience for institutionalizing of farm structure. Practical significance. Theoretical and methodological foundations for institutionalization of family farms in the organized market mechanism of management and main criteria for their identification make it possible to carry out further research on efficiency, evaluate prospects for their development, as well as develop directions of a policy of regulation and support of this management form