We studied the impacts of colonists, two groups of indigenous residents (Miskitu and Mayangna), and management by the Nicaraguan Ministry of Environment and Natural Resources (MARENA) on the forest of the Bosawas International Biosphere Reserve. Indigenous people and colonists subsist on the natural resources of the reserve, and MARENA is responsible for protecting the area from colonization and illicit exploitation. Using geostatistical procedures and Landsat images at three different time periods, we compared per capita deforestation and boundary stabilization in areas with colonists and areas with indigenous peoples. We also examined whether the Mayangna deforested less than the Miskitu and whether the Nicaraguan government has effectively defended the Bosawas boundary against the advance of the agricultural frontier. In addition, we analyzed the current distribution of land uses within the reserve and its contiguous indigenous areas with a supervised classification of current land cover. Indigenous demarcations protected the forest successfully, whereas the Bosawas boundary itself did not inhibit colonization and consequent deforestation. Indigenous farmers deforested significantly less per capita than colonists, and the two indigenous groups in Bosawas did not differ significantly in their effects on the forest. Our results show that indigenous common-property institutions and indigenous defense of homeland have been powerful factors in protecting the forests of Bosawas and that the difficult evolution of a nested cross-scale governance system in Bosawas-under pressure from indigenous peoples-is probably the key to the forest's survival thus far.