Since 1993, Nepal has implemented one of the most ambitious and comprehensive program of decentralization of forest management in the world, which is widely considered a success story in terms of participatory management of natural resources. Using quasi-experimental methods, we first quantify the net gains in tree cover related to the program in the Hills and Mountains of Nepal, and describe their temporal evolution. We highlight the relative importance of gains in terms of forest density over gains in terms of forested area. We then discuss the mechanisms driving forest restoration, stressing that, while community forestry played a role in increasing forest biomass and forest size, it also reduced demand pressures by altering energy choices.