<p>Understanding the engagement of smallholders in forest management requires a nuanced consideration of livelihood capital and social networks. However, the specific mechanisms through which these factors influence management choices remain insufficiently understood, especially in less developed rural contexts. Drawing on a case study of a single village in the hilly region of southwestern China, this study explores the factors that shape smallholders’ forest management strategies based on household survey data. We classify management approaches into three categories: self-cultivation (S), leasing to companies (L), and a mixed mode (M). In this local context, self-cultivation is the most common approach, with households’ livelihood capital scores exhibiting the pattern S &gt; M &gt; L. Larger and higher-quality forestland areas are associated with a greater likelihood of leasing. In contrast, access to forest mortgage loans, agricultural equipment, and production inputs is positively linked to the adoption of self-cultivation. The choice of a mixed strategy is more likely among households with expanded farmland, a higher proportion of agricultural income, and access to diverse information sources. Social network analysis reveals that village leaders act as central information brokers, while homophily contributes to convergence in management decisions among neighbors. A qualitative analysis also highlights additional factors perceived to influence decision-making. Although based on a single case, the study illustrates the important roles of livelihood capital and social networks in shaping management strategies and points to the need for locally tailored policies that reduce barriers and promote flexible, sustainable use of forest resources.</p>