Overaged full-sun cacao plantations and the need for sustainable production systems call for combining rehabilitation of plantations with the establishment of agroforestry. We tested the effect of drastic rehabilitation pruning of old cacao tree stock and the introduction of both high- and low-diversity agroforestry on survival, growth and yield of T. cacao in a commercial plantation in peninsular Malaysia over a period of 5 years. We further determined the incidence of pests and diseases of cacao pods and assessed the performance of the whole system for smallholder farmers, including yields of by-crops. Rehabilitation pruning negatively affected cacao tree development and short-term yield. No more effects of pruning on cacao yield were observed starting in the third year on in the monoculture and starting in the fourth year on in low-diversity agroforestry. We found similar cacao tree development and yield in the low-diversity agroforestry and a common practice monoculture, suggesting that the implementation of agroforestry is a commercially feasible strategy, due to additional income generated through timber production. Reduced cacao tree development and yield in the high-diversity agroforestry were compensated by additional harvests of cassava and banana compared to monoculture. Incidence of cocoa pod borer (Conopomorpha cramerella) was lower in the agroforestry systems, especially the high-diversity system, while the incidence of black pod disease (Phytophthora spp.) did not differ between agroforestry and monoculture. The findings highlight the potential of agroforestry to reconcile ecologically sustainable land use with natural, cost-effective pest management. While pruning needs to be done with timing and disease pressure in mind to minimize short-term yield losses, this measure proved to be a feasible strategy for establishing agroforestry on extant plantations.