Xishuangbanna, which is well known for its ethnic diversity, is located in the upper reaches of the Mekong River. Dai lowlanders make up one third of the total population, 13 other indigenous highland groups make up another third and the balance are Han Chinese. The research on which this paper is based was conducted in three villages, Dai, Hani and Jinuo communities and designed to explore the changing relationships between lowlanders and highlanders. It was found that over the past five decades two critical events triggered profound changes. One was liberation by the Chinese Communist Party in 1950, and the other the land and economic reform policies introduced at the beginning of the 1980s.