Two forest management categories (active and passive management) were compared in terms of their effects on forest vegetation and the extent to which they contribute to sustainable forest management. The study was conducted during 1999 in the central mid-hill district of Kabhrepalanchowk, Nepal. A list of criteria and indicators used to compare sustainability of community forests is presented. The indicators are grouped into four basic streams of forest and social system, viz., pre-condition, action, implementation and outcome. The bases used to distinguish level of management between two categories were limit on use of forest resources and application of silvicultural operations like singling, pruning and thinning. A total of 22 forests were selected of which 11 had a strong evidence of active management and another 11 forests had passive management. Tabulated data shows the difference between the two categories of forests as regards organization of activities, functioning of users group and implementation of operational plan. The comparison based on qualitative indicators clearly indicate that the active management practices fulfill the necessary conditions for sustainable management such as security of use rights, tenure, equity in benefit distribution and participation. Sustainability indices calculated for both categories of forests showed that active management practices provide better opportunity of resource utilization and people are capable of fulfilling their present and future needs.