Since the mid-1980s, rural livelihoods in Tanzania have rapidly transformed and become more commercialized, which is linked to a wave of changes in the local environments. This article explores the socio-economic and environmental interconnections between agricultural decline, food security, charcoal production, and  deforestation  in Bagamoyo district. The research methods involved questionnaire and thematic interviews, Rapid Rural Appraisal, and spatial analysis of land use/cover changes. Earlier studies from the area provided references for historical comparison. The results show that the recent decline in the agricultural output is linked to deteriorating environmental conditions, stagnation in agricultural technology and practises, livestock diseases, and the shift of labour to non-farm sectors. As most households were nearly self-sufficient in regard to basic staples yet in the mid-1980s, they now buy most foods from the market. Small businesses  and  particularly charcoal production have   become important strategies for maintaining food security and improving the standard of living. Although charcoal production brings much needed incomes for buying food and other necessities, this phenomenon has diverse negative outcomes. As the local forest resources are already depleted, and the food security situation remains vulnerable, determined and holistic efforts are needed to support small-scale farmers, sustainable livelihood diversification, and natural resource management.