Community Forestry is the main strategy in Nepal's forestry sector policy since it's inception in 1978 with the promulgation of Pachayat Forest Rules and Panchayat Protected Forest Rules. Over the past 24 years marvelous shift in policy and legislation had occurred to empower users as the managers of forest resources. Evidences suggest that the main forest management approach in community forestry is protection-oriented resulting in fewer benefits than otherwise could have been. On the other hand well-managed community forests can provide a range of forest products, which are essential to the rural communities. There is now growing voiced concerns to introduce active forest management in community forestry. This paper presents the consequences of existing practices and argues for active forest management in community forestry. Such active management will provide direct benefits to people and subsequently improved people's participation. Recommendations have been made to promote active forest management in Nepal's community forestry.