The aim of this study is to investigate the socio-economic impact of tea production to the people of Usambara. Specifically, it traces the evolution of tea production in Usambara from the 1900s to 1980s; it also examines the role of colonial state to the settler production in Usambara throughout the colonial period. Furthermore, it examines the way Usambara people were integrated in tea production as labourers and later as smallholder tea cultivators. The onset of German colonialism in Tanganyika made the Usambara people integrated into colonial economy. They were forced by the colonial system to participate in tea production in order to acquire their everyday needs. The study demonstrates that the introduction of tea production in Usambara was a turning point to the transformation of the pre-colonial Usambara societies into rural capitalist societies. This study shows how the development of tea production in Usambara was associated with the primary goal of colonial powers that was production of raw materials for the European industries by the use of cheap labour. The total integration of Usambara people into colonial economy led to the birth of individual ownership and abandonment of pre-colonial communal ownership. This integration was possible with the presence of colonial state. Far beyond all, the integration of Usambara people on tea production had socio-economic impact to the indigenous. This socio-economic impact should be explored in its broadest way by the researcher.