The Community Forestry (CF) Programme in Bhutan is still relatively small as it was only established in 1992, but it has the potential to reach 69% of the total population of Bhutan and improve their livelihoods. The CF programme will cover a maximum 10% of the total forest area and improve forest conditions, thus supporting the National Forest Policy. Non Wood Forest Products and sale of timber is only now beginning, but the potential for rural income generation is great. Understanding the overall potential of the CF programme’s contribution to livelihoods and environmental conservation, it is important to continue the up-scaling of the programme through refining current policies and rules, while supporting the further implementation. This will contribute to the National and Millennium Development Goals in Bhutan.