This paper examiens the efficiency of labour allocation and the productivity of labour by gender between and within farms and nonfarm enterprises on Thai farms. Cobb-Douglas production functions are estimated for both types of enterprises, using disaggregated data. The estimated parameters of those functions are utilized to anaylze efficiency and productivity issues. The results showed that interenterprise efficiency can be enhanced by allocation more male labour to nonfarm enterprises and more female labour to farm enterprises, but cultural constraints may impede such substitution. Policy makers need to improve incentives for nonfarm enterprises.