Forestland concession has been the dominant governance tool for the acquisition of natural state-owned forest resources in many tropical countries, including Bangladesh. Moreover, the forestland concession process confers the holder a bundle of rights. The Sal forests of Bangladesh are treated as some of the greatest concession forests, as a number of ethnic minorities use these forests for their daily living. Therefore, the objectives of the study were to assess the impacts of Sal forestland concession and land rights on the livelihood development of the ethnic minorities living in the Madhupur Sal Forest (MSF) area of Bangladesh. Using both qualitative and quantitative data collection techniques, the study found out that about two thirds of the original Sal forestland was grabbed by the state and non-state actors. As a result, the ethnic minority inhabitants have lost their traditional land and free access rights to the Sal forests. The process of losing ethnic minorities’ land and forest access rights has been enhanced by the institutional arrangements of the state, which had also created severe conflicts between the Forest Department and the ethnic communities. The study also revealed that the forestland concession has negatively affected the five livelihood capitals development of the ethnic minorities, consequently, their forest-based livelihood has shifted to non-securing jobs or poor income sources, like daily wage labor and subsistence agriculture. Despite this, the development drivers have emphasized the Sal forests and biodiversity conservation, while the livelihood development of the ethnic minorities has been ignored from every level. Therefore, this study would recommend establishing a legitimate process in order to settle the issue of traditional land and the forest rights of ethnic minorities, which could also attain the conservation and development goals of the Sal forests.