The study examined Sao hill forest plantation and its impact to the society of Mufindi 1900 to 1980. The study was guided by three specific objectives which were: to trace the historical development of Sao hill forest plantation in Mufindi, to examine the role of the state to the development of Sao hill forest plantation in Mufindi, and to investigate the impact of Sao hill forest plantation to the society of Mufindi. All these were done under mode of production theory. Moreover, the study was based on qualitative approach and the data were gathered through reliable data collection instruments like interview and documentary review. The study found out that during pre-colonial period, there were various economic activities in Mufindi. These included: agriculture, trade and animal keeping. During colonial period, different policies were established aiming at fulfilling the colonialists‟ interests. Such policies included land ordinance, land registration and forest policy which led to the establishment of Sao hill forest plantation. Then, during post-colonial period, different policies were introduced in order to improve the economy of the nation through plantation forest. Also, the study found out that Sao hill forest plantation had and it has both positive and negative impacts to the society. On the other hand, the forest has led to land alienation, moral decay, low wages, forced labour, damage of road infrastructure, scarcity of materials for making furniture, poor living and working condition, and prostitution. The study concluded that Sao hill forest plantation in Mufindi, mainly, has a negative impact to the society. It was recommended that the forest management should increase salaries to workers, policies should be improved to be favourable to the indigenous people, the management should contribute in improving social services. Also, to avoid prostitution, the accommodation should be improved so that the workers can live with their families.