Enlarging protected area networks (PANs) is critical to ensure the long-term population viability of Asian elephants (Elephas maximus), which are threatened by habitat loss and fragmentation. Strict policies of PAN enlargement that focus on wildlife conservation have failed largely due to difficulties in encouraging stakeholder participation and meeting the elephant habitat requirement. A co-management policy that promotes sustainable resource use, wildlife conservation, and stakeholder participation may have greater feasibility than the strict policies in a developing world. Here, we identified the suitable habitat of elephants using maximum entropy models and examined whether habitat suitability is indirectly associated with local economic development in human-dominated landscapes. We found that (1) the suitable habitat was mainly in areas of forest matrix (50% natural forest cover) with multiple land-use practices rather than relatively intact forest and near communities (mean distance two km) and (2) habitat suitability was negatively associated with local economic development (rP = −0.37, P = 0.04). From the standpoint of elephant habitat and its socio-economic background, our results indicate that co-management will be more effective than the currently strict approaches of enlarging PAN. Additionally, our results provide on-ground information for elephant corridor design in southern China.