This paper examines the postwar evolution of land consolidation policy in Japan in light of change in its agenda, scope, approach, policy tools and contexts with the aim to identify its possibilities and limitations for rural development. With a focus on Land Improvement Act (LIA) and other relevant policy tools and schemes, it analyzes the distinctive traits of policy change for the five sequential periods of the postwar era that reflects on socio-economic and political trends. Highlighting the change from government-led and infrastructure-based approach to community-based and managerial-oriented one to land consolidation as an integrated part of broader agricultural and rural development policy, the study suggests future evolution of land consolidation policy that is likely to involve further diverse interests in sustainable development held by a broad range of stakeholders including rural, urban and international communities.