Fighting terrorism and cracking down on smuggling across their restive border topped the agenda of talks between Prime Minister Prayut Chan-o-cha and his Malaysian counterpart Najib Razak on Friday in Bangkok.
The two leaders agreed to increase intelligence sharing on security and to move forward on possibly building a border "fence or wall" to combat transnational terrorism and smuggling.
"We will continue to work closely together to combat the threat of global terrorism, human trafficking and transnational crime, including violent extremism," Najib said at a news conference at Government House in Bangkok.
"These are very important matters for us to work on closely together because some of the perpetrators, they move between our two countries," he said, adding that the governments were still discussing a proposal to erect a "fence or wall" along the border.
"The matter is under consideration but we need to determine the physical dimensions of the wall or fence as well as the sharing of the costs," he said.
"We both face security issues including the fight against terrorism, human trafficking and illegal smuggling," added Gen Prayut. "That is why we need to address these issues seriously."
Mr Najib said he agreed with the Thai side that immediate, effective and comprehensive data based on biometrics was needed as people who have dual citizenship usually have different names.
The porous 650-kilometre border is a hotbed of crime, criss-crossed by human traffickers, drug mules and weapons smugglers.
Thailand's three Muslim-majority southernmost provinces are also plagued by an increasingly violent insurgency waged by ethnic Malay militants seeking greater autonomy, with more than 6,500 people killed since 2004.
Human trafficking, meanwhile, has slowed since the Thai government launched a belated crackdown last year following the shocking discovery of mass graves in squalid jungle camps.
Mr Najib reaffirmed Malaysia's commitment to hosting peace negotiations between the Thai government and a group that claims to represent the insurgents.
However, the talks have yet to bear any fruit and the recent uptick in violence suggests the rebel negotiators have little sway over fighters on the ground.
"It is very important for us to work on confidence building measures in the South", Mr Najib said, adding that the dialogue process was still at the initial stage of forming mutual trust and confidence.
Gen Prayut and Mr Najib also agreed to start building two bridges across Kolok River connecting Narathiwat province and Malaysia's Kelantan State by next year.
They also agreed to study possibility of a high-speed rail link from Bangkok to Kuala Lumpur and a rail line linking Hat Yai, Padang Besar and Ipoh.