Decentralised forest management is becoming increasingly widespread in especially tropical countries, but impacts on livelihoods of forest users often remain to be evaluated. This paper analyses intrinsically linked governance and livelihood outcomes of forest decentralisation in Bolivia, focussing on the livelihoods of the indigenous lowland population to whom forests are handed over for commercial timber exploitation. Data at community and household levels were collected in three indigenous communities using interviews, focus group discussions, visual appraisal methods (communal map and histories, seasonal calendars, resource trend analyses) and a survey including 54 randomly sampled households. It is concluded that the most important outcome of a Forest Management Plan is support for land claims, that barriers to profitable commercial timber harvest include costly technical requirements as well as low value of the resource handed over, and that indigenous benefit distribution is not necessarily equitable. Suggestions for improving existing regulations are provided.