The process of commercialisation-diversification in the highlands of upper northern Thailand and the accompanying dismissal of self-subsistence are documented based on the findings from seven case studies carried out in different agricultural and social situations during the past decade. The characteristics of the key driving forces powering this agrarian transition such as rapid economic growth, decrease in the share of labour employed in the agriculture, urbanization and changes in food consumption patterns, and improved communication infrastructures, are presented in the Thai context. The environmental impact of these profound agrarian transformations on the degradation of key renewable resources, particularly soil erosion, is assessed. Their socio-economic consequences on an extensive differentiation among farming households and equity issues are also discussed. Finally the authors draw several lessons from this Thai experience that illustrate the very strong adaptive capacity of small highland farmers. They could be useful in similar agro-ecological zones of neighbouring countries that are presently experiencing the same kind of agricultural transition in the Montane Mainland Southeast Asia ecoregion. Particularly, the article underlines the need for more holistic and integrated approaches to agricultural development and the management of renewable resources in highland agro-ecosystems to alleviate poverty while conserving the resource base.