This article examines a forest dispute that took place in the municipality of Muonio in northern Finland. The parties involved in the dispute were the Finnish state forestry enterprise Metsähallitus and a local coalition consisting of representatives of reindeer herders, the municipality, a local environmental NGO, a game association, and tourism entrepreneurs. The primary data for the article was gathered through thematic interviews that took place in 2005 and 2007. The dispute reflects the land-use needs of growing tourism in the area. It also provides an example of how change takes place through a dispute and how it is managed. The adaptive cycle heuristic is utilised to assist in an analysis of the change resulting from the dispute. Secondly, the Muonio case is examined in the light of the adaptive co-management approach in order to examine whether the change was governed adaptively. It is concluded that the dispute worked as a trigger for a policy innovation. That is, Metsähallitus rented the forests to tourism entrepreneurs and the municipality for ten years. The solution contained some features of adaptive co-management: a place-specific solution, interaction and negotiation. The problems were related to knowledge distribution and lack of careful deliberation.