The presence of the family farming on the forest areas is a characteristic of the north part of Rio Grande do Sul. This condition is the result of the settlement of European immigrants, implemented by public and private colonization projects along the 19th and 20th centuries. The colonies establishment resulted not only in the region effective occupation and in a relatively prosper colonial economic system but also in the reduction of the forest cover of the region. The relevance of this superposition resides in the impact caused by the agriculture over the dominance of the Atlantic Forest in the State, presently reduced to 7,45% of its original area, and by the socioeconomic dynamics of the rural communities and their production systems. This paper researches the agrarian dynamics and the family production units of colonial origin located in the mountainside of the Atlantic Forest of the Northern Coast of Rio Grande do Sul. This study has been performed in the context of the watershed of Maquiné River through the approach of Agrarian Systems and analysis of the Production Systems regarding the land production factors, work and capital. We tried to identify the preponderant factors of the transformations in the local agrarian reality and also understand how they have affected the evolution and what the current situation of the Agricultural Production Units is. The watershed of Maquiné River has an important fraction of its territory over Serra Geral mountainside area, inside the dominance of the Atlantic Forest. The establishment of family farming in the region happened with nonPortuguese European immigration in the 19th century. The transformation in the Production Systems implemented by the farmers until nowadays, allow us to identify two periods: the Colonial-Traditional Agrarian System and the Current Agrarian System. The change between these two agrarian systems is marked by the loss of the structure of the colonial economic system and, consequently, of the production system located in the mountainside and by intensive greenery production system appearing in the flat areas. Among the factors which have changed the agrarian reality is the production system crisis based on the slash-and-burn agriculture, along with the effects of the public politics, which have implemented the agricultural modernization, and been aggravated by the laws to protect the natural environment. The case studies to four typical production units of the mountainside indicate the presence of diversified production systems, with an important participation of self-consumption, with limited capacity to generate agricultural income and without perspective of familial succession. Limitations are imposed to the production systems regarding to the progressive scarcity of workforce, market access hindrance, prohibition of slash-and-burn practice and forestal licensee constraints. The nonagricultural incomes are important sources to the maintenance of these Production Units, but the socio-environmental conflicts, when there are, imply in the aggravation of non-functioning of the production system. The answers provided by the farmers through the Production Systems adaptation facing the situation occur according to the available production factor, with the extensive use of land, productive diversification, products benefaction and the integration between the cultivation and farming systems.