This paper examines the soil degradation processes that are threatening the productivity of the mechanized annual cropping areas in the Santa Cruz lowlands of tropical eastern Bolivia. The dominant process is that of machineryinduced and natural compaction, which has resulted in an estimated 50 per cent of the soils in the Central Zone being moderately to severely compacted, causing serious root restriction and the loss of both transmission and waterstorage pores. Degradation has made the soils increasingly susceptible to moisture stress due to the combined effect of (i) restricted rooting as a result of compaction and the hardsetting characteristics of the soils, (ii) reduced rainfall infiltration due to the loss of transmission pores and surface crusting, and (iii) a decrease in available soil moisture caused by the loss of storage pores, the incorporation of wind-blown fine sand deposits, and soil organic matter losses due to accelerated decomposition rates. The loss of transmission pores has also made the soils more prone to waterlogging in periods of high rainfall. The degradation tendencies of these soils are exacerbated by the greater variability of seasonal rainfall during the last 20 years that has led to a greater frequency of extremely high or extremely low rainfall events than hitherto.