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Land use governance in the Brazilian Amazon has undergone significant changes in the last decade. At the national level, law enforcement capacity has increased and downstream industries linked to commodity chains responsible for deforestation have begun to monitor some of their suppliers’ impacts on forests. At the municipal level, local actors have launched a Green Municipality initiative, aimed at eliminating deforestation and supporting green supply chains at the territorial level. In this paper, we analyze the land use transition since 2001 in Paragominas—the first Green Municipality—and discuss the limits of the governance arrangements underpinning these changes. Our work draws on a spatially explicit analysis of biophysical variables and qualitative information collected in interviews with key private and public stakeholders of the main commodity chains operating in the region. We argue that, up to now, the emerging multi-level scheme of land governance has not succeeded in promoting large-scale land use intensification, reforestation and rehabilitation of degraded lands. Moreover, private governance mechanisms based on improved product standards, fail to benefit from potential successful partnerships between the public and private sector at the territorial level. We propose a governance approach that adopts a broader territorial focus as a way forward.