Borassus flabellifer commonly known as ‘palmyra' has great economic and ecological significance, helps in biodiversity conservation and is climate resilient. Conversely, nowadays, due to longer gestation period and lack of skilled persons it has been rapidly vanishing from the landscape. Intercropping with groundnut augment the productivity of Palmyra based agroforestry system. A field investigation was undertaken during 2015–16 at Vilathikulam Taluk of Thoothukkudi district in Tamil Nadu to assess the performance of groundnut under palmyra trees as intercrop. An experiment consisted of four tree density levels corresponds to 976 trees/ha (3.2 x 3.2 m spacing), 730 trees/ha (3.7 x 3.7 m), 567 trees/ha (4.2 x 4.2 m) and 453 trees/ha (4.7 x 4.7 m), respectively. Interception of photosynthetic photon flux density was significantly highest under 453 trees/ha (1207.92, 1186.65 and 1248.19 µmol/m2/s, respectively) and it was on par with density of 567 trees/ha. Significantly maximum plant height (48.56 cm), LAI (4.51), dry matter production (3.46 t/ha), effective nodules/plant (65.84) and pod yield (876 kg/ha), and post harvest soil nutrients such as N, P2O5 and K O of 226.75, 11.95 and 264.81 kg/ha, respectively were registered in 453 trees/ha. However, it was on par with the density of 567 trees/ha. It could be concluded that the palmyra trees up to the density of 567 trees/ha is the optimum population for intercropping.