Cacao (Theobroma cacao) is a crop of the humid lowland tropics produced largely by small-scale producers and often on farms with a canopy of shade trees. Where a diverse shaded canopy is used, cacao farms support higher levels of biological diversity than most other tropical crops. A host of viral and fungal diseases, loss of soil fertility, and numerous socioeconomic problems facing producers, often makes cacao production locally unsustainable. Continued clearing of new lands threatens biodiversity. Moreover, new frontiers for cacao expansion are rapidly disappearing. Such problems can be addressed by increasing the long-term productivity of existing cacao farms and restoring abandoned lands. Improved shade management offers guidance along this path. Institutions involved with cocoa should establish collaborations with groups concerned with development, environmental protection, and most importantly producers themselves to pursue a program of research, extension and policy initiatives focused on the ecologically and economically sustainable cacao production on farms with a diverse shade canopy.