It has been argued that the ambiguities in Malawian customary tenure may aggravate processes of social differentiation and class formation. The article investigates this viewpoint based on the situation in the rural areas in Malawi's Southern Region. The political economy at national as well as local level does not indicate that accumulation of customary land has become important in understanding the increased economic differences between the elites and the great majority of smallholders. At the same time, the patterns of land distribution and commercialisation in smallholder agricultural production indicate the same. Customary land remains very equally distributed and the level of commercialisation of agricultural products is surprisingly low. An analysis of 45 court cases on land conflicts in the Thyolo and Mangochi Districts shows this to be intimately connected with the recurrent dilemmas produced by the inherent ambiguities in customary tenure and that it is mainly the smallholders who manage to secure their interests through this tenure. Finally, the paper demonstrates how the norms and regulations guiding customary tenure are continuously and successfully being utilised by the local population to re-appropriate land which government has allocated as leaseholds to estates outside the realm of customary tenure. The study thereby supports that customary tenure tends to increase rather than reduce land security for the poorer segments of the population.