In agriculture, a terrace is a levelled section of a hilly cultivated area, designed to slow or prevent the rapid run-off of irrigation water. Often such land is formed into multiple terraces, giving a stepped appearance. The human landscapes of rice cultivation in terraces that follow the natural contours of the escarpments like contour plowing is a classic feature of the island of Bali. In Peru, the Inca made use of otherwise unusable slopes by dry walling to create terraces.

This form of land use is prevalent in many countries, and is used for crops requiring a lot of water, such as rice. Terraces are also easier for both mechanical and manual sowing and harvesting than a steep slope would be.

Natural terracing, the result of small-scale erosion, is formed where cattle are grazed for long periods on steep sloping pasture. Sometimes, as a Glastonbury Tor, the result is regular enough to give an impression of archaeological artifacts.

From its origins in agriculture the practice of formally terracing a sloping site evolved in gardening. The Hanging Gardens of Babylon must have been built on an artificial mountain with stepped terraces like those on a ziggurat. At the seaside Villa of the Papyri in Herculaneum, the villa gardens of Julius Caesar's father-in-law fell away giving pleasant and varied views of the Bay of Naples.

Terraces were also methods of farming for the Inca. They used a system of canals and aqueducts, and made the water flow through dry land and helped them be fertile lands.

The Inca constructed the terraces on the slopes of mountains. They cut step-like ledges into the mountainside, so they could be used as field, where they planted crops. Using terraces also stopped the rain from washing away the soil. This technique was so successful, it is still used in the Andes Mountains.