It has been argued that the ambiguities in Malawian customary tenure may aggravate processes of social differentiation and class formation. The article investigates this claim based primarily on data from the rural areas in the Southern Region. An analysis of the political economy at the national and local level indicates that accumulation of customary land is not a significant factor accounting for increased economic differences. At the same time, land distribution in smallholder agriculture remains quite equal. A review of 45 court cases of land conflict in the Thyolo and Mangochi districts shows that the inherent ambiguities in customary tenure make accumulation of landholdings difficult and often serve the interests of the poor. Wealthy people prefer to invest in private land that the government has allocated to estates outside the realm of customary tenure, and the various logics of customary law in the long run facilitate a re-appropriation of private land into customary land. The article maintains that the reason why little attention has been given to the role of customary tenure in increasing rather than reducing land security for the poorer segments of the population reflects an over-emphasis on a transaction-oriented approach in the analysis of customary law. Some of the egalitarian and communal norms underlying customary tenure continue to be important in shaping everyday legal practice in Malawi.