This study uses a local political ecology approach that examines the physical and social dimensions of land use and soil erosion and their broader political and socioeconomic environment in Ban Lak Sip, a village located in the uplands of the Luang Prabang Province in Laos. The study indicates that, despite an explicit government policy aimed at improving both socioeconomic and environmental conditions, the resulting livelihood change has in part led to a deterioration in working conditions with mixed impacts on the environment. While land degradation and economic transition appear to have driven villagers to rework the role and importance of the land in their livelihoods, this paper argues that the Laotian rural development policy has constrained the adaptation process and led to a significant intensification in labour and land use. In fact, Ban Lak Sip villagers have had to adapt both to actual land degradation processes and to a discourse on upland environmental degradation constructed by the Laotian State and international development actors. The results of this study have significant implications for the formulation of environmental policy and for land degradation research more widely.