The Chinese government has carried out ambitious reforms in the country's collective forest sector since 2003. Based on two case studies from Yunnan Province, this paper examines the effects of China's Collective Forest Tenure Reform with regard to villagers' participation in their implementation of the reform, their effects on formal tenure rights and the changes to actual tenure rights on the basis of two case studies from Yunnan. The case studies show that higher levels of participation by villagers can lead to changes in formal and actual tenure rights that bring these rights more into line with national objectives. Thus, decentralization may be a critical precondition for successful forest tenure reform in China and beyond.