Community forestry practice in Nepal emerged in late 1970s from the failure of centralized forest governance to implement participatory forest management that improves deteriorating environmental conditions and provides forest products to local populace in the hills. This research assessed the perceptions of socio-economically heterogeneous forest users from eight community forests of Dhading district on environmental impacts of community forestry practice using group interviews and case studies. Two environmental impact-related concepts: forest products supply and local environmental conditions were assessed using rating scale based perception-indicators among three social groups: elite, women, and disadvantaged. Irrespective of social grouping, statistical analysis of the summated rating scores suggests that users perceived increased forest products supply and improved environmental conditions at the local level. Comparison of perceived environmental impacts among eight community forests indicates some differences due to variation in forest attributes in these community forests. Findings from this study are in agreement with the published literature that the community forestry practice has brought a positive change in the local environmental conditions and forest products supply situations in the hills of Nepal.