At a time of growing worldwide interest in decentralisation, the government of Bolivia legislated to decentralise forest management in 1996. This paper assesses the impact of devolution to municipal governments on sustainability of forest use and on participation in decision- making by previously marginalised stakeholders. Four case studies demonstrate the very diversity of outcomes that decentralisation was designed to promote. Overall, the first few years of decentralisation saw an increase in the influence of disempowered groups only where those groups were already well organised; elsewhere the hold of traditional elites over forest resources was bolstered. Sustainable management was not found to have been a priority for municipal governments or the majority of the forest user groups.