Abstract: This study aims to examine the pathways and mechanisms facilitating the integration between smallholder farmers in mountainous regions and modern agriculture. By employing regression and moderation models to analyze survey data from smallholder farmers in Yunnan Province, China, it validated the effectiveness of external and internal pathways as well as associated mechanisms in enhancing the mechanization levels of smallholder farmers in mountainous areas. Moreover, it explored the “trickle-down effect” of the influence of new agricultural entities on the mechanization levels of smallholder farmers in these regions. The findings revealed that, the mechanization levels of smallholder farmers in mountainous areas were primarily influenced by their social and natural resources, as well as internal mutual assistance behaviors. Although new agricultural entities did not significantly contribute to improving the overall mechanization levels of smallholder farmers in mountainous areas, they do exerted a notable impact on enhancing the mechanization levels of specific smallholder farmers. Agricultural enterprises demonstrated a significant driving effect in promoting the mechanization levels of smallholder farmers categorized as “non-cooperative members” or those who had not received free training. Conversely, farmer cooperatives only exhibited a significant effect in elevating the mechanization levels of cooperative members. Consequently, this study recommended increasing research and development investments in mountainous agricultural machinery, reinforcing the role of new agricultural entities in enhancing the holistic modernization of smallholder farmers, and fostering the organic linkage between smallholder farmers and modern agriculture.·