Polish and Rus' (Ukrainian) nobles, who had been granted extensive tracts of land (latifundia) in the newly acquired Ukrainian territories, established large manorial estates (filvarky) and either owned or controlled various enterprises mostly related to the new economic order. As they had neither the capacity nor interest in administering these estates and enterprises on their own, they turned to the so-called arenda or lease-holding system. The arenda system enabled them to lease to individual managers their fixed assets, such as grain mills, breweries, distilleries, manorial farms, and even the right to collect taxes and customs duties in their name. Their preferred managers were Jews, not only because they believed Jews had economic skills but also because Jews were less likely to acquire political power and challenge their noble patrons than Christian townspeople.

As leaseholders, Jews paid cash for land use or the exercise of the landowners' various monopoly rights; any income made beyond the cost of the leasehold would be their profit. As servitors of the Polish and Ukrainian landowners, however, the Jewish leaseholders were also liable to be depicted, in the words of historian Simon Dubnow, as "sponges to convey the wealth of the country and the toil of its inhabitants into the pockets of the lords."

Jews were also invited to settle and develop the economy in the nobles' private towns, where they engaged in trade (specializing in textiles, skins, furs, wax, lead, and salt) and crafts (as furriers, tanners, and tailors). They also served as haberdashers, butchers, and bakers. Offering goods and services, they became active in the local marketplaces, connecting the towns to the hinterland.

At the same time, more severe demands were made of the Ukrainian peasantry, increasingly reduced to serfdom. After the Union of Lublin, the Polish magnates and nobles extended to Ukrainian lands feudal practices prevalent in Poland, based on legislation they had won over decades, which gave them complete autonomy in managing their landed estates. The amount of labour demanded of the serfs and all other matters affecting them were left to the decision of the nobles, their tenants, or their stewards. Compensation to the nobles for the strips of land worked by the serfs usually took the form of obligatory unpaid labour (corvée). Historians have contrasted the arbitrary nature of this arrangement with the uniform system of serf obligations and relations maintained on the royal estates, where serfs generally received better treatment than on the private noble estates. As the burden and exploitation of the peasants increased, some fled to the territories under Cossack control and joined the Cossack uprisings.