Nepal has implemented community forestry program since the 1970s. The initial goal of the program was to supply forest products to local people on a sustainable basis. However, the program found effective in improving the livelihood of local people, living near the forests in the course of implementation. The study aims to investigate the role of the community forestry program in rural livelihood improvement of local people. A household survey along with both formal and informal discussions was carried out for the study. The findings of the study revealed that the program is supporting to the people,s livelihood by providing firewood, fodder/grass, and timber on regular basis. In addition, the program collects community fund from both forestry and non-forestry sources, which has multiple effects to carry out forest management and community development activities. These activities are also equally supportive to improving the local people,s livelihood. Finally, the study concluded that community forestry program is not only effective for collective forest management, but also it is equally imperative for empowering the local people to seize forestry activities as a means of rural livelihood improvement.