The Leasehold Forestry and Livestock Program (LFLP) was initiated by the Nepal Department of Forest (DOF) in 1993 with two goals: (1) resource regeneration and (2) poverty alleviation. Through support from the United Nations' International Fund for Agriculture Development, the DOF allocated degraded forest and rangeland to eligible, poor households in 10 pilot districts. Today the program supports almost 17,000 families in 22 districts. While the program's tenure and expansion portends success, some have called to question its real economic impact (Baral et al. 2003, Thoms et al. 2006). An exploratory assessment of LFLP was conducted in four districts through in-depth interviews with two major stakeholders: (1) Departments of Forest and Livestock Services officials, who administer LFLP, and (2) user groups. The objectives of the study were to assess perceptions of the social, ecological and economic impacts of LFLP from the perspectives of those most intimately involved in program delivery and outcomes. Thirty personal interviews were conducted in the fall of 2007. The interviews were transcribed and analyzed using qualitative analysis procedures. According to study participants, LFLP has contributed to resource regeneration, healthy forest composition, and increased biodiversity in leased forest parcels through controlled grazing, reforestation incentives, and local management. However, mixed reviews of the economic impact of the program were recorded. The collection of rotational funds among user groups has opened avenues of small investments. Yet, study participants blamed inadequate human resources within the Departments for impairing service delivery and depressing the rate of economic return. Furthermore, ambiguous and inconsistently enforced policies around program guideline compliance have engendered conflict over resource access and use. Perhaps the most significant windfall to user groups is not poverty alleviation but rather increased social capital and capacity building among user groups. User group formation has strengthened networks between members in standing against social discrimination, lobbying their rights at the district level, and sharing knowledge. Our findings suggest that benefits attained by user groups are not entirely commensurate with LFLP goals. We recommend further research on the economic impacts of LFLP. In addition, LFLP officials should recognize and bolster investments in social capital among LFLP user groups.