ABSTRACT Most developing countries in the tropics have embraced various forms of community-based forest management. Uganda’s Community Forestry (CF) approach grants de jure rights to community groups to manage and own proceeds from specified forest resources to enhance socio-ecological benefits. However, two decades following its implementation, there is insufficient empirical evidence linking changes in local community livelihoods to participation in CF. Guided by insights from the Sustainable Livelihoods Approach (SLA), we conducted a cross-sectional survey in seven villages surrounding two de facto CFs in mid-western Uganda to quantify and compare livelihood capitals, strategies and outcomes among 40 households that were members of Communal Land Associations (CLAs) that are mandated to manage the CFs and 91 non-member households. Our results indicate significant improvements in access to natural, social and financial capitals of CLA member households. On-farm income was the main household income source in the area, but households also exhibited heavy dependence on forest environmental income observed to reduce poverty incidence by 12.5% and 5.5% among CLA member and non-member households, respectively. In order to significantly contribute to rural livelihoods, conservation and development interventions should amplify both economic and non-economic incentives to consolidate the gains that have been made while developing human and physical capital.