In developing countries, the failure of the policing model of forest management whereby the central government protected forest reserves by preventing local communities from using them led to the emergence of Participatory Forest Management (PFM). In Tanzania PFM takes two main forms: Joint Forest Management (JFM) whereby the forest is owned by the central government or district council and the local people are involved in conservation of the forest and Community Based Forest Management (CBFM) whereby the community is given the right to own and use the forest that is on the general land. In both JFM and CBFM the village is the focal point in management of the forest and hence this approach to forest management is referred to as village-based forest management in this paper (VBFM). The paper discusses the strengths, weaknesses, opportunities and threats of village-based forest management in Tanzania in the light of the origin and characteristics of villages and governance in the country. A historical account of forest management is given. Among the strengths are the government structure with strong villages for many years, willingness of people to participate in CBFM initiatives and community-village collaboration. The fact that the approach is exogenous both in conception and funding, its poor spiritual basis, inadequacy of technical knowledge at the community level, inequality in cost and benefit sharing, poor infrastructure and lack of legal documentation of the villages are seen as weaknesses of CBFM. Opportunities for CBFM include appropriate national policies and international conventions and funding initiatives for sustainable forest management. Threats to CBFM include land grabbing for bio-fuel production and other enterprises, conflict of interest with the district and higher-level government and poor governance. The paper concludes by suggesting the way forward for tapping the strengths and opportunities of VBFM and addressing its weaknesses and threats.