Forests of the South Asian region, including major ‘hotspots’ of biodiversity, have been sustainably managed for generations by ethnically and culturally diverse traditional societies. The rich traditional forest-related knowledge possessed by the traditional societies in the region is closely linked to cultural diversity as well as to biodiversity in all its scalar dimensions (i.e., genetic, species, ecosystem, and landscape diversity). This knowledge, generated through an experiential process, has ensured sustainability of diverse forested ecosystems as well as livelihoods of forest-dependent communities. In recent times this knowledge base has been severely eroded, due in large part to deforestation and associated land degradation, processes triggered by forces external to traditional socio-ecological systems. Successful efforts have been made towards conserving traditional forest-related knowledge and linking it with formal scientific forest knowledge to develop ‘hybrid technologies’ relevant to sustainable forest management. To facilitate this process, it has been helpful to elucidate broad, generalizable, principles of traditional forest-related knowledge, rather than viewing this knowledge stream as ‘local knowledge.’ One such key principle that has contributed towards community participation in sustainable forest management initiatives relates to socially valued species that typically have important ecological keystone values. The protected ‘sacred groves’ that are abundant in the region are important learning sites both for understanding ecosystem dynamics and as a resource base for sustainable forest management practices. This is the context in which emerging institutional arrangements in the South Asian region, such as community forestry, joint forest management, and forest user groups are to be seen.