This article aims to adopt the concept of racialization in order to understand the relationship between indigenous identity and Thai forest politics by using field data of Muslim communities in the head watershed forest area in Satun province as well as related documentary data It indicates that racialization is different from ethnicity in a process where ethnic difference seems to be natural and substantial. At the same time, it is closed, individual and connected with racialization in western colonial countries in Asia. This process is the production and building up of indigenous identity which is different and de facto and legally accepted. The process of racialization in Thailand, which was never a European Colony, is a production or only Thai racialization. Then there is either integration or the deprivation of races other than Thai. Racialization in Thailand has existed along with the production of many kinds of space. The people who are counted to be Thai include the people in the city and the people in the countryside who live in the lowlands and who are farmers. A group of people who are deprived and we not counted as Thai are hilltribes of many ethnic groups such as Karen, Hmong and etc. who live in forests in the highlands. They cultivate rye, gather forest products and hunt. For these reasons it does not just exclude these ethnic groups from the national development process towards modernization and towards being on the margins of Thai culture, but these groups are also continually treated badly. They were determined to be a threat to the stability of the country when communism expanded in the forests of Thailand and in areas of opium poppy cultivation after the government banned opium poppy cultivation and outlawed opium addiction. The settlement and the cultivation system of these ethnic groups were determined to be a threat to the ecological system of head watershed areas which is very delicate. For these reasons and because they are non Thai, it was considered fair for the government and some Thai people in the lowlands to drive out these ethnic groups from the forests where they lived and have made a living for more than a century. It is a deprivation of their rights to local resources as well as a deprivation Thai nationality. To justify these ethnic groups’ living and land rights, depends on their cultivation system. Shifting cultivation, considered to have a negative affect helps conservation and the rehabilitation of the forests ecology. The community forestry has used the claiming of Thai rights or Thai nationality by the hilltribes to access the local resources utilizations rights because the Forest Community Act does not identify indigenous identity and does not deprive these ethnic groups who are not local people to access this right. The community forest movement is not a movement for the indigenous people, but it is a movement of Thai people who would like to claim citizenship rights under the Constitution (B.E. 2540) in order to counter racialist discourse noting that the hilltribes are not Thai. It re-defines the Thai nation as a multi-ethnic community which integrates the minorities in the highlands who should have citizenship like all Thai people. This situation is not similar to the situation in Malaysia and Indonesia where indigenous identity is at the heart of the debates on local resources management rights. However, the community forest movement focuses only on the rights of the hilltribes in the north and east, it ignores the rights of Muslims in the south who have different economic, social and cultural conditions. These Muslim communities have a self-sufficient-commercial economic system. They cultivate and process rubber trees for commerce. They also gather the forests products in the wildlife sanctuary as a livelihod. Whereas the Forest Community Act strictly limits the utilization of the community forest for commerce, the conflict between the community and the wildlife sanctuary unit cannot be resolved. Most of the forests in the north are under communal rights and it causes the community forests movement not to support individual land tilling while the land in the southern forests is unofficially allocated to the households. Individual land tilling and the proper rules of forest utilization may be the more suitable measure for the situation in the south.