Traditional forest-related knowledge (TFK) is under the risk of disappearance in many parts of the world, even though it can be an important source of knowledge for sustainable development. This study aims to assess the status of TFK retention and further identify the factors contributing to the erosion of TFK. A case of Dengcen, an ethnic village located in the Guizhou province of Southwest China was investigated. The degree of TFK retained by the village inhabitants of different generations was measured using a quantitative approach, with a vitality index of traditional environmental knowledge (VITEK). We found that age, gender, experience with urban life, and formal education level of an individual were influential factors that explained TFK retention in rural societies in China. In particular, formal education and urban expansion were found to be the main drivers of accelerating the deterioration of traditional forest-related knowledge. These findings have implications regarding sustainable forest management for policy makers that formal and informal education systems should be integrated in order to ensure traditional forest knowledge of local communities to contribute to sustainable development.