In 1957, the government of Ngo Dinh Diem deployed the Land Development Program in South Vietnam. Being one of the prime policies to rebuild the nation post-war, during five years (1957-1961), the Land Development program had moved nearly 70.000 people, mainly farmers in coastal central provinces and some from the North, to settle in the Central Highlands. However, it was such a paradox that, while planning macro programs to rebuild the country, Ngo Dinh Diem’s government lacked necessary facilities, human resources and proper awareness to implement those. As a result, after 5 years of implementation, the program fell into stagnation and was abolished. The conflict on land ownership and religion between the migrants and indigenous ethnic communities, which is the consequences of the Land Development program, have led to a prolonged stressful period in the Central Highlands since the early 1960s to the end of the war, undermining the trust of majority of local people towards the government, and thus, unintentionally did a favour to the Communists. This article analyzes the context of birth, content, as well as the limitations of the Land Development program as one of the failures of Ngo Dinh Diem regime in the effort to rebuild South Vietnam post-war.