The role of heterogeneity (the differences among resource users) in affecting the likelihood of collective action is strongly debated in the theoretical literature. We present evidence from a study of 18 forest user groups in Nepal. Heterogeneity is not a strong predictor of the level of collective activity. Rather, heterogeneity is a challenge that can be overcome by good institutional design when the interests of those controlling collective-choice mechanisms are benefited by investing time and effort to craft better rules.