Municipal commonage in South Africa offers previously disadvantaged, landless residents access to both direct ecosystem goods and services (EGS) that provide additional income options and indirect social and cultural services. Given that EGS production is a function of ecosystem health, it is imperative that commonage land be managed to maximize current local benefit streams while ensuring future options through the maintenance of natural ecosystem functions. The payments for ecosystem services (PES) model potentially offers an opportunity for contributing to local economic development while providing fiscal incentives for environmentally sustainable natural resource management. PES depends on the demonstration of quantifiable changes in EGS delivery due to improvement in or maintenance of high ecosystem health that are a verifiable result of modifications in management behavior. This thesis therefore compared spatial variations in (i) ecosystem health and (ii) nine direct and indirect EGS values derived from natural resources on the Bathurst municipal commonage and neighboring Waters Meeting Nature Reserve (NR) to explore how different land use intensities affect ecosystem health and the resulting provision of EGS. The results indicate that the total economic value of annually produced EGS on the study site is nearly R 9.8 million (US$ 1.2 million), with a standing stock of natural capital worth some R 28 million (US$ 3.4 million). Nearly 45% of the total annual production is attributed to Waters Meeting NR, with roughly 34% from the low use zone of the commonage and the remaining 22% from the high use zone. Of the total annual production value on the study site, roughly 59% is derived from indirect (non-consumptive) uses of wildlife for the study site as a whole, though this proportion varies from 25% in the high use zone of the commonage to 94% on Waters Meeting NR. The two largest annual production values on the study site derive from ecotourism (R 3.5 million, US$ 0.4 million) and livestock production (R 2.6 million, US$ 0.3 million), suggesting that while increased production of indirect EGS could generate significant additional revenues, especially on Waters Meeting NR and in the low use zone of the commonage, direct (consumptive) EGS will likely remain an important component of land use on the commonage. A PES project to support the adoption of silvo-pastoral practices could provide positive incentives for improved land use practices on the commonage and potentially be financed by conservation-friendly residents of the Kowie River catchment and/or increased ecotourism revenues from Waters Meeting NR. Allowing carefully designed and monitored local access to natural resources within Waters Meeting NR could also reduce pressure on commonage resources. Together, these approaches could lead to a more sustainable subtropical thicket landscape and ensure that critical natural resources remain available to support local livelihoods in the long-term.