This paper is based on primary information collected through an ‘extensive survey’ (village level data obtained from knowledgeable persons) of 50 villages and ‘intensive survey’ of 600 households in five locations in Tamil Nadu State in India. It examined the impact of the adoption of high yielding varieties of rice (HYV) on labour market adjustments by looking at permanent and  seasonal migration of people across study locations, and analysing the determinants of the variations in labour use and wage rates. The paper concludes that HYV adoption has significant positive effect on the use of both family and hired labour, but has no significant effect on the wage rates in any of the agricultural operations. The adoption of HYV is found positively associated with tractor rental which may have had dampened the labour using effect of the diffusion of HYVs. The paper also finds positive association between population growth rates and the adoption of HYVs, and argues that migration of people from favourable to less favourable regions tends to equalize the wage rate.