Growth in tea production in Kenya has slowed in recent years. This slowdown is attributed partly to policy reforms in the industry, which reduced government control on providing production, processing and marketing services for smallholder farmers. A major concern in liberalizing the industry is harmonizing the legal framework, adjusting the roles of institutions previously involved in controlling and regulating the subsector to mesh with the policy reforms. This paper outlines the reforms that have been implemented in the smallholder tea industry, the legal framework of operation and the impact of the policies on institutions and production. It analyses the existing legal framework for the tea industry, the delivery of services by the Kenya Tea Development Authority and the on-farm impact of the policy reforms. The results of the analysis attribute the slowdown of the industry to a poor regulatory framework that is not in harmony with privatizing the industry; poor provision of production, processing and marketing services to farmers by the tea authority; poor governance of tea factories; and conflicts and dissatisfaction among farmers.