This study investigates the resilience of indigenous knowledge in five Karen villages, located in Thailand's Chiang Mai, Chiang Rai, and Lampang provinces, that have been recognized for best practices in community forest management (CFM). The CFM model was initiated by local communities to promote forest conservation and community engagement. Data on CFM practices, land-use rights, social networks, and indigenous knowledge were collected through 17 in-depth interviews and 5 focus group meetings. The findings include how these Karen communities have adopted payment for environmental services (PES) to fund conservation projects and social welfare. More specifically, PES generates social capital by facilitating coordination with stakeholders from the private sector, academia, and government. These social networks promote markets for local products and advocate for indigenous land-use rights. The PES model also serves as a tool whereby Indigenous Peoples can shape their identities as innovative forest guardians and legitimize their residence within the forest. Additionally, the study reports on how Karen people have diversified their livelihoods to include hosting academic tourism, handicrafts, and livestock, reducing their dependence on forest resources.