The problems in the rural land sector of Sri Lanka are generally attributed to the failures in the regulatory framework, institutional set-up, property rights system and poverty. This study reviews the contemporary issues related to the land sector with special emphasis on identifying the major determinants of commonly observed problems. The following objectives are listed (1) to help identify the common characteristics and their causes in the rural land sector and (2) to understand whether the state land policies and institutional changes have led to efficient land use and the well being of the land users in Sri Lanka. It attempts to explore deeply the micro environment related to the rural land sector within a general macro setting. This study involves an extensive literature survey in which characteristics of the sector and the possible causes are identified.