Abstract: In order to reveal the relationship between farmers’ livelihood and farmland use, methods including participatory rural appraisal, questionnaire and mathematical statistics were adopted to study livelihood diversification, livelihood strategies and farmland use of the four types of farmers in Xinping County of Yuanjiang dry-hot valley based on the household survey data from 2013 to 2014. The results showed that the combination of agricultural and non-agricultural strategies was very popular in the study area. To cope with the current problems in farming, pure agricultural and agriculture-dependent farmers mainly adopted measures such as expanding planting scale, increasing cultivation input and engaging in non-agricultural activities; meanwhile non-agricultural-dependent and non-agricultural farmers mainly adopted measures such as decreasing both planting scale and investment, engaging in farmland transfer as well as various off-farm activities. Pure agricultural and agriculture-dependent farmers would choose those crops with shorter growth period, more investment, complex management and higher value, meanwhile non-agricultural-dependent farmers would choose crops with longer growth period, less investment and simpler management. As farmers were transforming from pure agriculture to non-agriculture, the process of farmland transfer also accelerated.