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The reduction of tropical deforestation is of crucial importance for mitigating climate change and curbing the loss of biodiversity. In light of the current international efforts to reduce deforestation associated to REDD+, effective and efficient country-specific policy options need to be identified to make progress on the ground. Taking lowland Bolivia as an example, we propose a systematic approach to identify and discuss such policy options; this systematic approach can be applied to other tropical contexts with ongoing conversion of forests to agricultural uses. We begin with the distinction of three land use categories associated with the main proximate causes of deforestation in lowland Bolivia, viz. mechanized agriculture, small-scale agriculture and cattle ranching, each of them linked to typical agents. Based on a systematic analysis of spatial and socioeconomic criteria, we then estimate the potential of land use expansion and the likely costs of deforestation reduction in order to formulate suitable policy options for each of the three proximate causes of deforestation. Although mechanized agriculture caused more than half of deforestation in lowland Bolivia, we argue that cattle ranching activities, which contributed to 27% of deforestation between 1992 and 2004, should be targeted as a priority since its expansion threatens forests in many different locations and improvements could be achieved at relatively low costs. In this light, enforcing land use legislation, accompanied by strengthening institutions on national and local levels, constitute tasks of utmost importance.