Tanzania introduced the decentralisation of its health systems in the 1990s in order to provide opportunities for community participation in health planning. Health facility governing committees (HFGCs) were then established to provide room for communities to participate in the management of health service delivery. The objective of this study was to explore the challenges and benefits for the participation of HFGCs in health planning in a decentralised health system. Data were collected using semi-structured interviews and focus group discussions (FGDs). A total of 13 key informants were interviewed from the council and lower-level health facilities. Five FGDs were conducted from five health facilities in one district. Data generated were analysed for themes and patterns. The results of the study suggest that HFGCs are instrumental organs in health planning at the community level and there are several benefits resulting from their participation including an opportunity to address community needs and mobilisation of resources. However, there are some challenges associated with the participation of HFGCs in health planning including a low level of education among committee members and late approval of funds for running health facilities. In conclusion, HFGCs potentially play a significant role in health planning. However, their participation is ineffective due to their limited capacities and disabling environment.