On farm trials were conducted during wet season 2011and 2012 at Ngorlung village under Ruksin block of East Siang district of Arunachal Pradesh. Two rice varieties viz. CAU R-1 (improved variety) and Itanagar (local variety) were transplanted under system of rice intensification (SRI) and traditional system of cultivation. The results reveled that incidence of stem borer was significantly lower in SRI, mean damage of 5.67 and 6.43 per cent (dead heart) and 13.46 and 14.35 per cent (white ear head) was recorded in CAU R-1 and Itanagar, respectively, as against a higher incidence of dead heart (7.89%) and white ear head (15.67%) in CAU R-1 and 10.72 (dead heart) and white ear head (18.12%) in Itanagar under traditional system. The incidence of leaf folder case worm, blue beetle and Gundhi bug m-2 were lower in SRI as compared to traditional system. The occurrence of natural enemies like wolf spiders, lynx spiders, damsel flies, dragon flies and lady bird beetles population was higher in traditional system as compared to SRI. Among all the diseases, blast was lower in SRI with a mean damage of 7.28 and 9.87 per cent in var. CAU R-1 and Itanagar, respectively as against a higher incidence of 9.65 in CAU R-1 and 12.63 per cent in Itanagar. Among Bacterial diseases, bacterial leaf blight incidence was found to be lower in CAU R-1 and Itanagar with the mean 4.94 and 5.88 per cent, respectively under SRI as compared to a higher level of incidence 5.81 in CAU R-1 and 9.88 per cent in Itanagar under traditional system. In both the system of rice cultivation, var. CAU R-1 recorded higher grain yield than the Itanagar. The economic analysis indicated that benefit cost ratio was higher in traditional system as compared to SRI.