The expansion of cash tree crops, such as natural rubber, in the tropical region of South Asia has resulted in an agricultural transformation from subsistence production to market‐oriented production, implicating the local ecological environment, economy, and household welfare. Based on representative household survey data collected from 611 smallholder rubber farmers in the upper Mekong region, Southwest China, this study examines the impacts of rubber farming on the household dietary diversity of smallholders and explores its potential impact channels through farm production diversity and household income. The results show that rubber expansion has significantly improved household income but negatively affected farm production diversity. While rubber cultivation always has significant and positive effects on dietary diversity, it also indirectly impacts on dietary diversity by the two channels, namely farm production diversity and household income. A set of heterogeneous analyses reveals that rubber cultivation contributes more to household dietary diversity for smallholders having relatively low household wealth or living in a village without a market. While the findings confirm the contribution of rubber cultivation to improving household incomes, food security, and nutrition, the potential risks under the background of falling rubber prices cannot be ignored. The findings of this study not only have important policy implications for improving the food security and nutrition of smallholder rubber farmers but also provide a better understanding of the welfare effects of cash tree crop expansion in tropical regions.