<PAGE>

                                  EXHIBIT 10.1

                AMENDMENT TO THE EMPLOYMENT AGREEMENT AS AMENDED
                  BY AND BETWEEN THE COMPANY AND MARTHA STEWART

            AMENDMENT, dated as of March 15, 2004 (this "Amendment") to the
Employment Agreement, dated October 22, 1999, as amended (the "Agreement"), by
and between Martha Stewart Living Omnimedia, Inc. (the "Company"), a Delaware
corporation, and Martha Stewart (the "Executive"). Capitalized terms used in
this Amendment but not defined herein shall have the meanings provided in the
Agreement.

                              W I T N E S S E T H:

            WHEREAS, the parties hereto entered into the Agreement in connection
with the Company's initial public offering;

            WHEREAS, the Executive was the founder of the Company's predecessor
entity and has been instrumental in the growth of the Company since its
inception;

            WHEREAS, until June 4, 2003, the Executive served as the Company's
Chairman of the Board and Chief Executive Officer;

            WHEREAS, on June 4, 2003, the Executive voluntarily resigned as
Chairman of the Board and Chief Executive Officer of the Company and the parties
agreed to the Executive's continuation of her employment with the Company as its
Chief Creative Officer;

            WHEREAS, on March 15, 2004, the Executive voluntarily resigned her
positions as a director and Chief Creative Officer of the Company and assumed
the position of Founding Editorial Director;

            WHEREAS, the Company recognizes that the Executive's creative
talents and contributions to the Company are unique and have been integral to
the success of the Company and that continuing to have the benefit of
Executive's unique creative talents and contributions is in the best interests
of the Company and its shareholders;

            WHEREAS, the parties agree that it is in the best interests of the
Company and its shareholders for the Executive to continue her employment with
the Company as its Founding Editorial Director, a non-officer position; and

            WHEREAS, the parties desire to amend the Agreement to reflect the
changes in the Executive's position and responsibilities;

            NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                  1.    Amendment to Section 1 (Employment). Section 1 of the
                        Agreement is hereby amended and restated as follows:

                        "Effective as of March 15, 2004, the Company hereby
                        agrees to continue the employment of the Executive in
                        the position of Founding Editorial Director of the
                        Company, and the Executive hereby agrees to continue her
                        employment in such capacity, on the terms and conditions
                        set forth below."

                  2.    Amendments to Section 3 (Position and Duties). The first
                        two sentences of Section 3 of the Agreement are hereby
                        amended and restated as follows:

                                      -22-

<PAGE>
                        "Effective as of March 15, 2004 and until the end of the
                        Employment Period, the Executive shall serve as the
                        Founding Editorial Director of the Company, with the
                        duties, authority and responsibilities described on
                        Schedule A. The Executive shall report to the Chief
                        Executive Officer of the Company."

                  3.    Amendments to Section 6(d) (Termination - Good Reason).
                        The second sentence of Section 6(d) of the Agreement is
                        hereby amended by deleting the words "or her approval in
                        her capacity as the Chairman of the Board".

                  4.    Continuing Effect of the Agreement. This Amendment shall
                        not constitute an amendment of any provision of the
                        Agreement not expressly referred to herein. Except as
                        expressly amended hereby, the provisions of the
                        Agreement are and shall remain in full force and effect.

                  5.    Counterparts. This Amendment may be executed by the
                        parties hereto in separate counterparts (including
                        facsimile counterparts), each of which shall be deemed
                        to be an original, and which taken together shall be
                        deemed to constitute one and the same instrument.

                  6.    No Waiver. It is understood and acknowledged that none
                        of the changes to the Agreement effected by this
                        Amendment and no action or inaction by any party in
                        connection therewith shall be construed as a waiver of
                        any rights of the Executive or the Company arising under
                        any agreement between the Executive and the Company or
                        under applicable law all of which are expressly
                        reserved.

                  7.    Governing Law. This Amendment shall be governed by, and
                        construed and interpreted in accordance with, the laws
                        of the State of New York, without regard to its conflict
                        of laws or choice of laws principles.

                  IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date first above written.

                                 MARTHA STEWART LIVING OMNIMEDIA, INC.

                                 By:    /s/ Sharon Patrick
                                    --------------------------------
                                    Name: Sharon Patrick
                                    Title: President & Chief Executive Officer

                                 EXECUTIVE

                                      /s/ Martha Stewart
                                 ----------------------------------
                                 Martha Stewart

                                      -23-