Participatory forest management in China has been a dynamic and evolving process towards sustainable forest management, gradually integrating forest management with rural development by enhancing community participation and benefits derived from forest management. Participatory forest management has been increasingly supported by fiscal policy, land tenure reforms, management models and capacity building initiatives. It has also become an important discourse for sustainable forest management (SFM) in China. Since the early 1990s, we have seen participatory forest management piloted at community levels, scaled to regional levels and institutionalized in policy at the national level. However, obvious challenges for enhanced adoption exist, including institutional barriers, little research, poor practices and a failure to replicate lessons learned from successful cases. To enhance SFM through participatory forest management, it is recommended that China decentralizes forest management, resolves forest tenure issues, improves multi-sectoral cooperation, incorporates the concept of participatory forest management into key forestry programs and enhances capacity for research and practice.