The large‐scale rural to urban migration, generating sizable remittances, is often considered as an important means to help reduce poverty in rural China. However, penury is still stubbornly haunting the mountainous rural areas of inland China where numerous rural–urban migrants originate. Neglected in the current literature, the landform conditions are vital to explain the diverse effects of labour migration on rural household production in China. By adopting a revised simultaneous equation model, this study explores empirically how variations in regional landform conditions configure the effect of labour migration on rural household production using the data from our 2013 survey of migration intentions among rural labourers in China. The results show that remittances exert a substitution effect on agricultural production of rural households in the mountainous areas but have a promotive effect in the plain and hilly areas. Labour cutback imposes a less negative influence on agricultural production of rural households residing in the plain and hilly areas than in the mountainous areas. The effects of remittances and labour cutback on nonagricultural production of rural households are positive and negative, respectively, although these effects are insensitive to the variation in landform conditions. As a consequence, local wage level of rural households is more difficult to be improved by labour migration in the mountainous areas. Therefore, it is likely to lead to excessive labour migration and poverty trap.