When the British conquered Palestine they believed it to be a territory that had been subject to misrule and mismanagement. Unaware of the extensive social transformations of the late Ottoman era, colonial officials typically saw the countryside as a social, cultural, and economic backwater, the productive resources of which were fettered by quasi-feudal institutions, archaic cultivation techniques, and a dysfunctional land regime. This assessment, and the British commitment to the Jewish National Home policy, led the colonial state to privilege the economic development of Jewish enterprises and the yishuv, in the belief that the benefits would trickle down to and help pacify the Arab community. Especially in the first decade of Mandatory rule British economic policies regarding taxation, credit provision, external and internal trade, and revision of the land regime were often geared towards Zionist interests while negatively impacting the peasantry. These policies escalated the trend towards peasant dispossession that had emerged during the late Ottoman era and contributed greatly to the erosion of the rural social order, ironically bringing about the outcome that colonial authorities hoped most to avoid: the creation of a landless, disaffected semi-proletariat. This paper examines the decomposition of the Palestinian peasantry under British rule and peasant responses to the conundrums they confronted. Beyond the official measure of landlessness in the 1931 census it uses three lenses to track the transformation of the peasantry: 1) the collapse of the tithe (‘ushr) as a collectable tax; 2) the crisis of under- and unemployment among wage laborers before 1936; and 3) the expansion of Arab slums in the port cities. Against much of the prevailing literature on the subject, it contends that a significant portion of the peasantry had become semi-proletarianized before World War II. Contrary to the suppositions of peasant docility and subordination put forth by the British, Zionists, Palestinian politicians, and a range of scholars, peasants both on the land and in the cities resisted official policies in a variety of fashions. Besides flouting and bending land laws, peasants joined youth societies and labor unions, engaged in widespread sabotage of rural Zionist property in the early 1930s, and rose in revolt in 1929 and again from 1936-39. In providing a précis of modes of peasant/migrant resistance the paper probes changes in corporate identities and social mobilization, suggesting that the disintegration of the old agrarian order gave rise to growing peasant autonomies before the 1940s.