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While customary land tenure systems are still prevalent in most African countries, they are believed to be evolving to private land ownership. However, questions about how they are evolving and what determines this evolution remain un-answered. This study contributes to the literature by empirically analyzing the process of the evolution of land tenure systems in Uganda using community-, household-, and parcel-level data. By tracing rural-to-rural migration patterns, we found that immigrant-dominated and ethnically diverse communities have a higher incidence of private land ownership. As an implication of the evolution of land tenure system, we found that land markets are more active in immigrant communities, which enhances efficiency in land allocation through land transactions. In fact, we found a large and significant inverse relationship between farm size and productivity in communities with communal land ownership, and an insignificant relationship in communities with more privately owned land. These findings suggest that rural-to-rural migration, through weakening traditional social systems, promotes the shift from communal to individual land ownership which, in turn, boosts land transactions and efficient land use.