Small farmers have been blamed for forest degradation in O’Valley, Gudalur. The state’s response to this perceived forest degradation in the post-colonial period has been to increasingly environmentalise forest policy and law through extending its territorial control over the ‘forested commons’, consequently labelling farmers as encroachers. This article argues that the state was in fact very much implicated, along with the Nilambur Kovilagam janmi (landlord), in the transformation of the forested landscape into a plantation economy so as to increase its revenue. It also highlights the contradictions in the post-colonial state’s environmentalisation of policy, the impact of this environmentalisation on small farmers and how small farmers, along with larger estate owners, resisted mostly through legal recourse the state’s efforts to reclaim undeveloped forest land. By doing so, the article highlights the contested meanings often ascribed to the forested commons that underlie conflicts over resources.