This paper examines significance of institutional environment for agricultural production in post-communist countries. It adds to the extensive research of agricultural production functions by introducing a model of agricultural production, which explains aggregate agricultural production using various inputs, as well as variables representing institutional environment. Results concerning elasticities of material inputs (land, labour, capital) are different from previous research due to the specifics of post-communist countries. More importantly, the paper shows that in transitional economies institutional variables are significant as well and identifies several institutions relevant to the agriculture. Finally, it suggests some directions for further research.