ABSTRACT Balancing the human needs with conservation priorities has become a growing concern worldwide. Conservation approach has shifted from protection of biodiversity in isolation to sustainable approach. This change is related to environmental as well as developmental activities. This case study in six Buffer Zone Community Forest User Groups (BZ CFUGs) have been conducted to assess socio economic situation of the user’s groups in relation to the sustainable resource utilization for their livelihood and biodiversity conservation comprising with empirical data from Buffer Zone areas of Shey-Phoksundo and Royal Chitwan national park. The field observation, measurement in forest and discussion with user shows that the forest condition is not favourable for sustainability even in the case of good BZ community forest as perceived user group. It shows that people try to manage forest sustainability if it can fulfill their needs. Loss of equity of forest resources in rural poor communities is the same as a loss of natural resources in the environment. It is suggested that the degree of sustainability should measure by using locally suitable criteria and indicators. Key words: Buffer Zone Community Forestry, Biodiversity Conservation, Sustainable Resource Utilization, livelihood, and equity.