This study analyzes forest change in an area of Nepal that signifies a delicate balance between sustaining the needs and livelihood of a sizable human population dependent on forest products, and an effort to protect important wildlife and other natural resources. The study area, a portion of the Chitwan valley district of Nepal, represents what may be becoming a common institutional mosaic in many countries of the world who have a population reliant on forest products for their livelihood: (1) a national park; (2) a designated park buffer involving participatory forest management programs; (3) scattered patches of designated community forest; and (4) large areas of adjacent landscape made up of mostly private landholdings under agricultural practices. Utilizing Landsat images from 1989 and 2000, we analyze land cover change in each of these management zones using landscape ecology metrics and quantifying proportional distributions of land cover categories. Our results show significant differences in terms of land cover dynamics and landscape spatial pattern between these land ownership classes. These findings indicate that community-based institutions (participatory management programs in the park buffer and the designated community forests) are capable of halting or even reversing trends in deforestation and forest fragmentation.