iarjalsIARJALSIARJALS2708-5104https://doi.org/10.47310/ Iarjals.2021.v02i01.083A Review of Community Forestry Contributions to Livelihood Assets in Nepal and Contemporary ChallengesParbatRajThaniPrashidKandelUnited for Sustainable Development, Kathmandu, 44600, NepalKathmandu Forestry College, Kathmandu,1276, NepalThis paper is designed to demonstrate contribution of community forestry management practice in Nepal for the improvement of livelihood assets and identify the overall ongoing challenges that are hindering the sustainable livelihood development. Many related peer reviewed research articles and government documents were taken into account and the result analysis was done through using sustainable livelihood framework of DFID, 2000. The results showed that successful implementation of community forestry has been able to bring many positive changes in overall livelihood assets (natural, social, physical, financial and human capitals) in comparison with the previous situation. However, many obstacles in sustainable livelihood development have also been observed at the same time. The observed shortcomings are lack of mainstreaming biodiversity and ecosystem services, poor PES strategy implementation, lack of linking forest to food security, lack of measuring the sustainable use of forests and other natural resources(natural capital), weak and inefficient governance, equity, cost and benefit sharing (social capital), lack of community forest based enterprise development(financial capital), lack of literacy in poor, ethnic and lower cast, women(human capital) which need to be curbed.