Deforestation issues are more problematic when indigenous (adat) communities, living within a forest, have lived there for many generations. These adat communities, who employ traditional land-use, are frequently accused of encroaching on the forest. To understand existing and future trends in the spatial patterns of the expansion of traditional land-use and deforestation, we conducted a case study in the Kandilo Subwatershed using mixed methods with image interpretation, spatial modelling and sociocultural surveys to examine the interrelationships between physical conditions, community characteristics and traditional land-use expansion. We investigated community characteristics through household interviews, communication with key informants, and discussions with focus groups. By using an area production model, we were able to analyze the effect of improved farming systems, policy intervention and law enforcement on traditional land-use expansion and deforestation. Based on our examination of a 20-year period of traditional land-use activities in adat forests, the evidence indicated that the steeper the slope of the land and the farther the distance from the village, the lower the rate of deforestation. Our study found that customary law, regulating traditional land-use, played an important role in controlling deforestation and land degradation. We conclude that the integration of land allocation, improved farming practices and enforcement of customary law are effective measures to improve traditional land productivity while avoiding deforestation and land degradation.