Sharada Devi forest has been protected and used by local communities under community forestry arrangements since the 1980s. Here, as in many other parts of Nepal, the rights and responsibilities for forest resource management have been successfully transferred to the local Forest User Group (FUG). However, although the condition of both forest and water resources have visibly improved under these arrangements, the flow of products from the community forest is far below its capacity for sustainable production. Farmers' Forest Management Schools (FFMSs) are now being implemented with the aim to add value to community forestry practices, by developing ways of managing the forest that ensure it yields substantial benefits to its users. This article explores the challenges and the opportunities that have become evident in these initial efforts to implement FFMS.