In recent years, there has been a move in eastern and southern African countries from centralised and state-driven management of natural resources towards decentralised and people-centred based regimes. In Tanzania, the inception of the 1998 national forest policy has led to institutionalisation of community-based forest management (CBFM) and joint forest management (JFM). A number of years later, it is worth assessing the impact of this policy on the resource base and people’s livelihoods. This paper uses two case studies of forest reserves under participatory forest management to explore this issue. Secondary data was gathered from various studies conducted in those two forest reserves. In addition to the analysis carried out by the various authors, further analysis involving content and structural analysis and synthesis of documented information was done. The results of the study revealed that CBFM at Duru-Haitemba had a positive impact on the resource base and people’s livelihoods – the forest is healthier than before and people are satisfied with the products they collect from the forests. On the other hand, the impact of JFM at Kwizu Forest Reserve has not yet produced desirable results since illegal activities are still rampant and, apparently, forest exploitation has increased instead of decreasing. The reasons behind the success at Duru-Haitemba and relative failure at Kwizu are varied, but are most probably linked to ownership of resources and law enforcement. Clear definition of rights, returns and responsibilities and adequate incentives are important for sustainability of people-centred management of natural resources.