A shift from cultivating cereal crops towards vegetables and other cash crops has evolved through the process of agricultural intensification in the hills of the Himalayan region. Agricultural intensification has attracted the attention of researchers in Nepalese agriculture due to its potential impacts on the environment and socio-economic status of farmers. Nevertheless, socio-economic drivers of agricultural intensification are as yet poorly studied in the Himalayan region. Farmers' perceptions of the effects of agricultural intensification on society and the environment are analysed in the Ansikhola watershed of Kavre district, Nepal. Before the onset of agricultural intensification, food sufficiency was the primary measure of the economic condition of farmers. However, in recent years agricultural income and profits have become key socio-economic measures. This study reveals that intensive agricultural practices shifted need-based cereal farming to market-oriented vegetable-based production systems, thereby improving socio-economic conditions for farmers. Positive changes in wealth and social status, migration from rural to urban areas, and shift in social division of labour are other important impacts.