Abstract:It is widely believed that Participatory Monitoring and Evaluation (PM&E) can help community organisations improve their internal learning and governance. However, the processes of programme monitoring and evaluation as practised by many organisations lack the elements of community participation and ownership and the appreciation of its contribution to community learning. Wider lessons on participatory development demonstrate that only locallyinitiated and community-led monitoring can improve communities' performance and change their institutional practices. Drawing on the recent experience of Livelihoods and Forestry Programme (LFP), this paper makes the case for community-generated planning, selfmonitoring and evaluation for adaptive learning and good governance in Community Forest User Groups (CFUGs) in Nepal. These processes, conceptualised as Adaptive Learning and Action (ALA), have enabled CFUGs to identify their vision, formulate activities to achieve the vision, and regularly monitor the progress against the identified indicators. The process has also enhanced transparency, participation and accountability in CFUG governance.