Environmental degradation, particularly of land resources, is one of the most important problems affecting farming highlands, due to steep slopes, high vulnerability and suggested over-exploitation of scarce natural resources (Blaikie & Brookfield 1987, Becerra 1998, Amsalu 2006, Amsalu & DeGraff 2006). Therefore, highlands are a primary target of conservation measures because of the perceived relationship between cultivation practices, poverty and land degradation (Lestrelin & Giordano 2007).This paper presents a case study from a Mazahua indigenous community in the rural Highlands of Central Mexico. It analyses Mazahua farming livelihoods characterised by subsistence agriculture, marginality, poverty and severe land degradation. Mazahua farmers face constrained environmental, socioeconomic and cultural conditions, which influence their local decisions on natural resource management. The results describe the capital assets base used, where land, livestock and crop production are imperative assets to support farmers’ livelihood strategies. It analyses local management practices to achieve livelihood outcomes in the short/ long term, and to improve or undermine land characteristics and other related assets. It also presents a farmer typology constructed by local perceptions, a controversial element to drive sustainable development strategies at the local level. Finally, it discusses how local land management practices are adopted and their importance in developing alternatives to encourage positive trade-offs between conservation and production in order to improve rural livelihoodsPROMEP- SEP Universidad Autónoma del Estado de México