In contrast to the rest of Latin America, where most forests belong to the state, in Mexico, village communities legally possess most of the country's remaining forests. Despite this, Mexican forest-management policies frequently empowered business interests and the state at the expense of rural communities. These policies marginalized campesinos and squandered opportunities for environmentally sound development. Nevertheless, following a fitful process of land reform, sporadic support for village communities from reformers in the agrarian reform and forestry departments, and the organized demands of villagers, Mexico now has the most advanced community forestry sector in Latin America. Today, hundreds of villages own and operate their own forest management businesses. They generate rural economic benefits while conserving forests, and they represent an important model for sustainable development in Latin America. In the 1990s, neoliberalism brought changes to agrarian and forestry law that initially benefited business interests while abandoning the forest communities best situated to integrate forest conservation and rural development. Campesino groups and their supporters, however, struggled to maintain and extend community forestry in Mexico, with some recent policy victories. Community forestry remains an important part of Mexican forest policy. Mexican forest conservation and the well-being of the campesinos who inhabit those forests depend on strengthening and extending the model, which has implications for forest policy elsewhere in Latin America.