This paper presents the results of management-oriented research on energy, forest, and human health issues in a remote mountain area, the Sagarmatha National Park and Buffer Zone (SNPBZ), Nepal. The research was based on a broader, integrated participatory framework ultimately intended for use in adaptive management. The present study focused on the application of a participatory modeling framework to address problems related to energy demand and consumption, forest condition, and indoor air pollution, which were defined by the stakeholders as important issues to be addressed. The models were developed using a generalizing design that allows for user-friendly adaptation to other contexts (free download at  http://hkkhpartnership.org). Moreover, we simulated management scenarios in collaboration with all modeling actors with the aim of building consensus on the understanding of the system as well as supporting decision-makers' capacity not only to respond to changes, but also to anticipate them. Importantly, the system dynamics assessment found that the SNPBZ forests are affected by an increasing demand for fuelwood (occurring due to tourism growth), as one of the main sources of energy. Selected forests show an average reduction of 38% in forest biomass from 1992 to 2008. This shows that the business-as-usual scenario is unlikely to result in the preservation of the current forest status; in fact, such preservation would require 75% of fuelwood to be replaced with alternative energy sources. At the same time, a 75% reduction of fuelwood use (and an 80% reduction of dung use) would reduce indoor carbon monoxide (CO) concentrations to the standard limits for CO exposure set by the World Health Organization.