This thesis explores firm diversification from the oil and gas (O&G) sector to the renewable sector, among Norwegian O&G service and supply firms. The purpose is to contribute to the debate of sustainability transitions from a firm oriented point of view and to inform policy makers on barriers to diversification. Global warming and a changing climate, due to factors like high CO2 emissions, highlight the urgency to transform the fossil dependent energy sector. The thesis draws on strategic management literature to account for firm behaviour, studying system change at the micro-level. The study is conducted by a qualitative approach. Data is gathered predominantly by the use of in-depth interviews with supply firms in O&G, but also observation and content analysis of relevant documents serve as complementary data. The purpose is to understand why and how these firms diversify from O&G and to investigate barriers associated with such a process. By understanding firm motivation, processes, and barriers to diversification, this study informs policy makers on actions that can lower entry barriers and facilitate firm diversification. The findings suggest that firm resources are essential for understanding the type of target industry, transition processes and experienced barriers. Smaller firms experience more barriers to diversification due to less available resources, compared to larger firms. Firms predominantly diversify for firm survival and growth, and they diversify by redeploying existing resources and by developing new ones. Barriers to diversification mainly relate to the market dimension and not the technological dimension. However, a significant barrier affecting all supply firms diversifying is the lack of a clear renewable strategy for the sustainability transition needed for the fossil-dependent energy sector. Thus, there is a need for governmental declared long-term goals and commitment. This thesis, therefore, suggests activities and policy instruments needed to facilitate firm diversification and lower entry barriers to renewable industries. These are a clear renewable strategy, a domestic offshore wind power market, learning arenas, research and development policy instruments, policies targeting the market dimension, and large firm-small firm collaborations.