Governments around the world are increasingly devolving authority for forest management to the local level in an attempt to strengthen the management of national forests. Community forestry programs are recognized as providing a range of economic and social benefits and having a positive impact on increasing forest cover. However, concerns have been raised about the capability of user groups to manage community forests in a sustainable and equitable manner. This study analyzed the initial experience with community forestry in Bhutan and assessed the degree to which national policies have enhanced the likelihood of successful management by forestry user groups. The study found that the studied communities possess many attributes of successful forest user groups due to historical and socio-cultural reasons. National policies, including the unusual provision of handing over well-stocked forests to user groups, have further enhanced the likelihood of sustainable management by forest user groups. The initial experience of forest management by user groups in Bhutan is promising, and merits further study now that that a much larger number of community forests (CFs) have experience with harvesting.