With the history and experiences of more than one hundred years in formulation and revisions since the British colonial period, the forest policy of Bangladesh has turned away from a traditional production premises towards protection. Establishing protected areas for biodiversity conservation dates back to the 1960s. The strategy gained impetus with the passage of national legislation in 1973 that included the provision of declaring forests as national parks, wildlife sanctuaries and game reserves for the protection of the natural forest resources. Due to the absence of a clear demarcation between core areas and buffer zones and the absence of concern for the sustention of local communities' usufruct rights, degradation continued in the protected areas. Therefore, an alternative strategy of co-management involving local stakeholders and provision of incentives in terms of Alternative Income Generation (AIG) supports has been introduced by the government under a donor assisted project. This new policy is being implemented in five pilot sites. This co-management strategy has demonstrated positive impacts and, increasingly, is gaining recognition as appropriate for other protected areas. This paper reviews the evolutionary history of and periodical changes in the forest policy of Bangladesh - highlighting the conservation aspects, the development of protected areas and the gradual adoption of their collaborative management.