Fears of ensuing losses of biodiversity and indigenous cultures raise important issues concerning land and development policies in indigenous communities living at the margins of protected forest reserves. Understanding the evolution of interactions between state land tenure institutions, customary land practices, and environmental changes provides insight for the maintenance of both forest habitat and native cultures. The case history of the Masewal (Yucatec Maya) village of San Antonio (Cayo), Belize, is presented because its lack of an active land market allows direct associations to be drawn between governmental land policies and customary practices. The Belizean state leasehold tenure system, implemented in the 1960s to support Masewal control over ancestral lands, has become a negative social influence leading to land underutilization, supporting rapid forest conversion to pasture land and increasing village differentiation in household access to traditional natural resources. A new form of land tenure may be needed if natural resources and Masewal culture are to be protected.