The Indonesian constitution mandates that all natural resources remain under the control of the state. Over the years, legal stipulations put different levels of government in charge but the authority to manage the forests stayed with government agencies. This has been ineffective in reducing deforestation in the country and the villagers in close proximity to forests continued to live in poverty. Without property rights, they were unable to legally enjoy the benefits of forest resources and consequently were tempted to take part in illegal forest exploitation, such as poaching and illegal logging. In recent years, the Indonesian government gradually implemented provisions of the national forestry law, granting those local communities the right to get involved in forest resource management. The villagers were required to set up a village forestry board and they had to share the profits with the state in order to be granted the right to use and access forest resources. The Indonesian community forestry policy intends to provide concessions to 33,000 villages across Indonesia but property rights alone will not reduce deforestation and improve the villagers’ livelihoods. Complementary activities are necessary. This study presents the experiences in this regard, of the two villages of Sembungan and Buntu in Kejajar District, Wonosobo Regency, Central Java Province. These two villages are situated only 10 kilometres apart and both had been offered partial property rights under the community forestry policy. The way both villages managed the opportunity was substantially different. While Sembungan developed an ecotourism site, which has contributed to the villagers’ livelihoods, Buntu has struggled to build its own initiative. Instead, this village was threatened by plans of the national state-owned forestry company, Perum Perhutani, to cut trees around the village. The two case studies highlight the importance of activities in 3 areas that complement the community forestry policy in order to achieve the intended beneficial outcomes. Firstly, there needs to be an agreement among the villagers that changes due to economic development can be beneficial for the village. An exposure to successful cases may help create such an agreement. Secondly, there needs to be capacity-building programs to improve planning, organization, finance and human resource management skills in the villages. Thirdly, villages need to engage with external actors in neighbouring villages, government agencies and business circles to win their support for local development projects.