Adoption of improved agricultural technology has been proven to be an effective strategy for poverty reduction in rural area. The uplands in Southern Yunnan are in transition towards permanent agriculture and the traditional swidden agriculture is being changed and abandoned. There was successful example in upland areas of southern Yunnan taking the improved upland rice technology as entry point, but few studies have been conducted to assess the economics of improved technology adoption and to identify factors affecting farmers’ adoption and its impact. This study is based on primary data of 500 households collected from five prefectures in southern Yunnan. The improved technologies of upland rice in the study focused on the adoption of improved upland rice variety. Technology adoption was analyzed applying Probit and Tobit models to household level data. The results indicated that the spread of improved technologies depends mainly on outside interventions including technology extension program and terrace construction. They are both supported and funded by the government and it to some extent shows the strong influence of the government policy and program on upland farmers. The household level impact of improved technologies was assessed using a propensity score matching (PSM) method as this is an effective to remove self-selection bias in impact assessment. The results proved that improved technologies adoption increased household income.