During the expansion of industrial plantations across the Global South, forest and land conflicts have emerged on a very large scale. Despite recent reforms of resource governance, many countries are yet to develop effective formal mechanisms to resolve land and forest conflicts effectively, and mediation has emerged as an alternative conflict resolution strategy. This article contributes to the ongoing discussion of global large-scale land acquisitions ('land grabs') by examining how such third-party mediation works to resolve land conflicts. Bringing together mediation and the political economy literature, it considers how mediation works, and how politics, institutions and power shape the conflict mediation process and its outcomes. It derives its conclusions from extensive fieldwork based examinations of four 'successful' mediation cases in oil palm and pulpwood plantations in Indonesia. Our study finds that the ability of local disputants to sustain collective action, to transnationalize disputes, to intensify and to ripen the conflict are all critical in shaping mediation processes. While the empowerment of local communities can support mediation and improve procedural fairness, mediation only provides a partial solution to the conflicts caused by large-scale land acquisitions. Wider reforms to State law and land governance system, and initiatives to address key structural problems are required. Given the widespread use of third-party mediation to resolve conflicts across the Global South, the lessons from this study are relevant to the discussion of large-scale land acquisitions elsewhere.