Narathiwat governor Apinant Suethanuwong said most shops in the city had opened their doors on Friday morning. He expected more would also open in Sungai Kolok district.
A majority of local shops in the southern border region were shuttered last week after they were warned by insurgent groups not to work on the Muslim sabbath.
The bus services in the area were running normally on Friday. They were halted last week.
In Yala province, at least 30 soldiers had been deployed in the commercial areas of Muang district to ensure security.
In the municipal area, where the population is mostly Buddhist, about 70% of local stores were open.
However, on the outskirts of the town, where the people are predominantly Muslim, the local markets remained quiet. The vendors said they were still concerned about their safety, despite the increased security presence.
A number of checkpoints had been set up to conduct searches of suspicious vehicles entering the area, as part of the effort to regain the locals' confidence.
Deputy Prime Minister Yutthasak Sasiprapa said the disruption to trade in the deep South will be over within a month.
Gen Yutthasak said the situation had improved over the past two weeks , and more than 30% of the local shops in Yala and Narathiwat had resumed normal business.
However, trading in Pattani province had not improved because the locals were still concerned about their safety. He expected the situation should to return normal by the end of November at the latest.
It was reported that the majority of shops owned by Buddhists had opened, but Muslims are still reluctant to do so.
Gen Yutthasak said the insurgent threat may come from outside Thailand and there had been an attempt to drive Buddhist Thais from the region while blaming the state authorities for the ongoing violence. The government is doing its best to ensure peace and order in the South, the deputy prime minister added.
In addition to the 40,000 troops already in the region, the government has recently increased the size of the police force to 5,000 and self-defence volunteers to 2,700.