Despite fifty years of effort, few development interventions in forest areas have worked in favor of either the forest dwellers or the forests. A new approach and urgent action are needed. In this paper, we argue that recognizing and strengthening the property rights of forest communities is the first and most important step towards avoiding impending social and political collisions and establishing the sound institutional footing needed for social and economic development in forest areas. W e also argue that with robust and proactive steps, climate change and the global response to it can be converted from a major threat to a major opportunity to address these challenges. Action on rights and governance will also produce benefits not otherwise possible and yet critical at national, regional and global levels.