One of the unexpected outcomes of increased regional integration in southern Laos has been a boom in household production and roadside sale of wood charcoal. This paper develops an ethnographically informed analysis of charcoal as a socially embedded market, providing insights into the sociopolitical relations of access, legal and extra‐legal regulations, and the distribution of rents that characterise this trade. Contrary to some assumptions about charcoal as a necessarily exploitative commodity, this paper points to some of the advantageous income smoothing opportunities that charcoal presents for many rural Lao households and detail the complex ways in which charcoal production can relate to forest sustainability and degradation. The paper elaborates a perspective of entrepreneurial Lao charcoal communities, energetically utilising locally available natural resources, for direct cash income. Charcoal production networks also connect everyday household livelihoods in Laos to large‐scale extractive industry, in ways that have been arguably underemphasised previously. At the same time, the charcoal trade highlights the structural limits to notions of smallholder agency and local participation in commodified market relations, within broader political‐economic contexts decidedly shaped through uneven development, and accumulation through dispossession.