The aim of this study is to investigate Users’ perspectives on community engagement in the health governance structures at the sub-district levels in two rural districts in Tanzania. The specific objectives of the study are: i) to examine health service Users’ awareness about the existence of local health governance structures, ii) to examine the level of community engagement and functionality of the structures, and iii) to identify the contextual factors affecting the functionality of local health governance structures. The study draws on empirical data collected from 281 service users, health service boards and committees’ members and key informants through questionnaire survey, focus group discussions and semi-structured interviews. The study found limited health service Users’ awareness about the existence of health governance structures partly because some health facilities lacked the boards and committees and in some cases community members were not involved in the selection of community representatives through their village assemblies. Further, most of the community health governance structures were not functional as had infrequent meetings and varied composition contrary to the guidelines for their establishment. Consequently, community engagement in these structures was very limited. The factors affecting functionality of these structures included lack of clarity among stakeholders on the procedures for establishing the structures, limited capacity of community members on their roles and responsibilities in the structures and delays in establishing and replacing expired service boards and committees. It is concluded that, the purpose of improving healthcare service delivery through improved community participation and governance in the local health governance structures is still far from being realised. Thus, the district councils should strengthen the functionality of the health governance structures by creating awareness among stakeholders at the ward, village and health facility levels about the guidelines for establishing and functioning of the health governance structures.