This study analyzes the impact of the Indonesian government’s decentralization policy and movement on the state forest community involvement program on the island of Java from 2000 to 2014. For more than 30 years, approximately 76 percent of the state-owned forests in Java, covering 2.4 mio. hectares (5.9 mio. acres or 9,266 square miles), or 42 percent of the forests in Java, were exclusively managed by the State Forest Company (SFC). The general perception was, and largely still is, that the decentralization era reforms had little or no effects in Java, simply because the national decentralization regulations essentially maintained this dominant role. Thus, possible effects were hardly examined. This study aims to fill this gap by analyzing whether the national decentralization movement and policy affected and changed the policies and practices of involving local actors and communities in Java’s state forest governance and management. Our analytical framework follows the Policy Arrangement Approach (PAA), comprising four main analytical dimensions for assessing change and stability: The actors involved; the distribution of power and resources; the existing and applied rules; and discourses concerning the topic of research. The analysis is based on an extensive review of scholarly literature and policy documents, as well as 73 in-depth interviews with actors, from the national to the local levels, of two districts in Central Java. Overall, our findings show that the nationwide decentralization movement significantly affects the modes of collaborative forest management in Java, much more than one would expect if only looking at changes in the respective legal texts. The movement fueled changes, inter alia, by promoting discourses on sustainable forest management for local development, and triggering the revival of grassroots movements further empowered by local non-governmental organizations (NGOs), as well as by triggering the formal institutionalization of the informal norms and practices of local communities. New actors entered the arena, and the distribution of power, resources and benefits drawn from state forest management has changed in favor of district authorities and local communities at the expense of the State Forest Company.