This paper considers the effect on local resource extraction of an ambitious, government-initiated community forestry program in Nepal. Beginning in 1993, the government of Nepal began to transfer all accessible forestland from the national government to local communities by creating local groups of forest users. This study uses institutional details about the implementation of this program to evaluate its impact on the extraction of wood for fuel. Transferring forests to local groups of forest users is associated with a significant reduction in resource extraction in communities that receive new forest user groups.