Road and highway development can provide multiple benefits to society, but without careful planning, this development can result in negative social and environmental impacts. The 1,200 km Pan Borneo Highway project (PBH) in Sabah, Malaysian Borneo, is constructing new highways and up-grading 2-lane roads to 4-lane highways. We assessed the potential impact of the PBH on communities using three width scenarios of 50m, 75m and 100m for planned highway alignments, and identified potentially impacted dwellings and community lands. We estimated that 65–93 villages will be impacted, and that 1,712–7,093 dwellings and 3,420–6,695 ha of community lands (e.g. paddy, oil palm smallholdings and rubber) may be lost to the PBH. Due to land tenure technicalities, many affected households may not get compensation for the loss of their homes and lands. The PBH will disproportionally impact Sabah’s Indigenous Peoples, with the Kadazandusun most affected. For this study to be constructive, we provide a low impact alternative alignment for a part of the PBH; discuss the socio-economic and cultural impacts of the PBH, and offer some perspectives on current planning procedures in Sabah to support more sustainable and equitable development.