Forest products contribute immensely to rural livelihoods and household income. However, their contribution to climate change adaptation in semi-arid areas, and the limited ecosystem management capacities of rural communities are poorly examined. We examined the influence and challenges of cash income derived from forest products on livelihoods and climate change adaptation using data from 130 household surveys, 20 participatory mapping exercises, several in-depth interviews, and field observations in the Limpopo Basin of Botswana. Households derived livelihoods and/or income from Mopane caterpillars, firewood, timber, palm plants, wild fruits, thatch, medicinal plants, natural dyes, natural pastures, and game meat. Mopane caterpillars, firewood, and other forest products featured in the top ten sources of household income and contributed weighted monthly income of BWP 1,647.27 ± 1,519.04, BWP 1,110.02 ± 1,980.05, and BWP 780.56 ± 1,360.32, respectively (US$1 ≈ BWP13.4). A higher proportion of households (62.3%) were in the low-income category, earning income below BWP5,000/month. Income derived from Mopane caterpillars and firewood made a significant difference between low-income and high-income households (p = 0.006). Generally, higher proportions of high-income households adopted climate change adaptation measures than proportions in the low-income category, indicating the influence of cash income on household adaptations. However, significant differences were only observed in cropland expansion, purchasing of supplementary livestock feed, drilling boreholes/wells, and use of drip irrigation (p < 0.05). We discuss the potential threats, such as the unsustainable harvesting of forest products, caused by an increasing need for cash incomes and the interconnectedness with distant urban markets. Such threats add to the institutional and biophysical challenges, further limiting prospects for effective adaptation in the Limpopo Basin of Botswana. We call on the government to capacitate and strengthen traditional authorities—as custodians of local resources—in the regulation, management, and conservation of forest products to make them more sustainable adaptation options.