Indian megacities are witnessing significant changes in land use in their peri-urban areas due to the location of large infrastructure and development projects such as airports, special economic zones, information technology parks, real estate ventures and ring roads. The location of such projects and consequent land acquisition from rural farmers have serious impacts on vegetable cultivation and their livelihood security in the peri-urban areas. The present article deals with land acquisition for an outer ring road, a I 59-kmlong eight-lane express highway, around the Hyderabad city and its impact on loss of vegetable cultivation. Based on secondary and primary data, the study brings out that the loss of land had an adverse impact on the extent of vegetable cultivation and the economic security of the rural folks. Though the incomes from vegetable cultivation were not very high, they were earning incomes regularly from this activity and were able to support their families including children's education, clearing small debts, meeting household expenses, etc. The loss of such regular income has adversely affected their livelihood security. With the loss of land, they have also lost income from cattle rearing and dairying. Many of them could not cultivate their remaining lands as the massive new road separated them from those lands with reduced access. A good number of them have become poorer and became unskilled workers in the nearby factories or construction sites as they have no knowledge of any occupation other than agricultural work. The Resettlement and Rehabilitation (R&R) Policy for the project-affected families (PAFs) introduced by the Government of Andhra Pradesh is not applicable to the outer ring road as it is not an irrigation project. As a consequence, the affected people in the villages did not qualify for R&R benefits under this policy except cash compensation for the lost lands. The Master Plan for Hyderabad Metropolitan Region-203 I also does not mention the preservation of vegetable cultivation areas in the zoning regulations.