Collaborative forest management (CFM) is widely promoted because of its purported ability to deliver both conservation and livelihoods improvement goals. It is especially attractive to developing countries where livelihood improvement is a key focus of national governments (that have simultaneously made global conservation commitments). Uganda has embraced CFM in its policy framework and promoted it for nearly two decades. However, there is dearth of empirical evidence on livelihoods outcomes for communities as a result of CFM. Using a dataset collected among forest-fringe communities around Budongo central forest reserve (CFR) – a state forest where CFM has been implemented since the early 2000s, we ran a propensity score matching (PSM) to establish suitable counterfactuals and adapted the Sustainable Livelihoods Framework (SLF) to assess changes in livelihood outcomes for CFM participants. Our results show that CFM has increased access to legally-sourced forest products from the state forest and privately (on-farm). However, it has reduced the participants' dependence on forest environmental income while no significant changes in total household income were recorded. The de-jure status of the CFM groups has served as a source of security for CFM participants to access credit. CFM has also offered a platform for conservation and development partners to promote alternative livelihoods schemes that target increased dependence on on-farm income. In order to achieve the envisioned livelihood benefits, conservation and development initiatives should focus on improving household income and promoting sustainable non-farm business models among the CFM groups.