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Across the globe, locally controlled forestry is gaining momentum, increasingly recognised for improving environmental resource management and bringing socio-economic returns to local communities. In short: it works for both people and forests. Since the 1990s, Tanzania has pioneered locally controlled forestry (also known as African participatory forest management). Supported by donors and NGOs, the government has transferred management of more than 2.5 million hectares of forest and woodland to local communities, restoring forests and improving environmental services. But converting and scaling up this transfer of natural capital into long-term economic benefits for communities remains a challenge. We present three emerging sustainable community forest enterprises that have delivered important social, economic and conservation benefits, and explore options for scaling up these approaches across Tanzania and elsewhere.