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Recent decades have seen a rapid movement towards decentralising forest rights and tenure to local communities and indigenous groups in both developing and developed nations. Attribution of local and community rights to forests appears to be gathering increasing momentum in many tropical developing countries. Greater local control of forest resources is a response to the failure of government agencies to exercise adequate stewardship over forests and to ensure that the values of all stakeholders are adequately protected. We reviewed evidence of the impact of decentralised forest management on the biodiversity values of forests and conclude that special measures are needed to protect these values. There are trade-offs between shorter-term local needs for forest lands and products and longer-term global needs for biodiversity and other environmental values. We present evidence of local forest management leading to declining forest integrity with negative impacts on both local forest users and the global environment. We advocate greater attention to measures to ensure protection of biodiversity in locally-managed forests.