The study was carried out in the Gaukhureshwor community forests of Kavrepalanchwok district as the majority of activities in community forestry was concentrated in the middle hills of the country. The study focuses on the improvement over rural livelihood through community forests and alleviate poverty as stated in the Ninth Five Year Plan (1997-2002). The study analyzed the direct and the indirect benefits derived from the community forests. Major benefits were increased in the supply of fuelwood, leaflitter, fodder, water supply and other forest products as well as increased in the employment opportunities. Above all the major findings, significant benefits of the community forestry process is reduction on time as the forest product necessary was easily available from the community forests. The study showed that after the formation of the community forests there was a surplus in the fuelwood for cooking and heating, leaflitter for animal bedding and the timber will be available in the future. Furthermore, there was a time saved of 03.625 hours per family per day that could generate on an average of more than twelve thousands rupees annually. In addition, community forestry activities generated a regular and seasonal employment for the users.