Cashew cultivation has emerged as an important agricultural activity in promoting sustainable livelihoods for smallholder farmers. The present study investigates the impacts of cashew cultivation on sustainable livelihoods of smallholder farmers in the Southern region of India, addressing a significant research gap in the understanding of how this crop affects various aspects of farmers' lives. Using a mixed-methods approach, the study reveals that, cashew farming significantly increases farmers’ income, leading to improvements in food security, education, social status, and standard of living. These findings contribute to new insights into the socio-economic and environmental dimensions of cashew cultivation, offering a holistic understanding of its role in rural development. Additionally, the study also emphasizes the need for government policies supporting smallholders in cashew farming, including training, access to quality seeds, and best agricultural practices. Social welfare initiatives and cooperatives can improve the overall well-being of cashew farming communities. Research and development should prioritize climate-resistant cashew varieties to address environmental challenges linked to cashew cultivation. The study’s results also provide a foundation for future research and policy formulation aimed at enhancing the practice of cashew farming for sustainable livelihoods.