Abstract : The peatland becomes a source of living by the people around it which causes an exploitation that triggers the fire so that it damages peatland ecosystem. The aims of this study are to identify the social economic condition of the people living in peatland area and to determine the socioeconomic factors that influence welfare. The research location is Bunut sub-district and Kerumutan sub-district, Pelalawan district which are two of fire point areas in 2015. Three-Stage Least Square is applied to analyse the data. The main result of this study shows that socioeconomic conditions of the peatland community in Pelalawan District, Riau has a productive age and low education level. The majority of the community's livelihood as oil palm farmers, so that the largest income derived from oil palm cultivation. This income is used more to meet non-food needs. The community welfare of peatland is influenced by asset possession and income. The biggest asset owned by the community is peatland, which is mostly used for rubber and oil palm cultivation. Exploitation of peatland has caused damage and the income of peatland communities is not optimal. The welfare of peatland community can be improved without exploitation the peat and with rubber and palm oil cultivation. In addition, welfare can be increased if the peatland community can create non-farm livelihoods, so that the peatland ecosystem can remain sustainable.