The increase in tobacco production while ameliorating the condition of the participant households has caused challenges to stakeholders particularly those in the governance of forest resources upon which the sector is hinged. Massive deforestation has proceeded at an alarmingly high level, in a way that threatens the long term viability of the tobacco sector and sustainability of natural forest resources. The entrance of previously disadvantaged majority into the once minority-dominated tobacco sector (and economy) in a quest to improving their livelihoods, is driving forest landscape changes that pose inherent environmental challenges including climate change. This article adopts institutional and landscape approaches to explore and explain the drivers, nexus and implications of smallholder tobacco as a livelihood strategy to the forest landscape changes and the subsequent imperative for governance of the sustainable utilization of forest resources in Zimbabwe. Drawing on documentary evidence the paper concludes that this situation poses a dilemma to forest and livelihood policies, hence the need to examine new institutional and livelihood initiatives.