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Lao People’s Democratic Republic (PDR) has been experiencing significant forest depletion since the 1980s, but there is little evidence to demonstrate the major causes and underlying drivers for the forest cover changes. In this study, we investigated the relationship between forest cover decrease and increase in the south of Lao PDR between 2006 and 2012 and selected physical and socio-economic factors. We used a map of forest cover changes derived from analysis of Landsat ETM+ imagery in 2006 and 2012, together with socio-economic and physical environmental data from the national authorities. The study area has experienced noticeable forest cover changes: both forest decreases and increases were unevenly distributed throughout the region. Logistic regression models were used to test relationships between forest cover decrease or increase and selected physical and socio-economic factors. Forest clearance was associated strongly with elevation, distance to main roads and shifting cultivation practices. Meanwhile, forest cover increase was more likely to correlate with rubber plantations. Native forest and shifting cultivation lands were vulnerable to being converted into rubber plantations. This research provides much-needed information on which to base forestry policy and decision making to minimize and prevent current deforestation, as well as manage potential risks in the future.