Preventing, halting, and reversing ecosystem degradation is now a global priority, partly due to the declaration of the United Nations (UN) Decade on Ecosystem Restoration by the UN General Assembly 2021–2030 on 1 March 2019. Apart from the most recent global target to protect 30% of the natural planet by 2030 as part of the Kunming-Montreal Global Biodiversity Framework agreed during COP15, there are several other global goals and targets. The Government of Bangladesh (GoB) has also pledged to restore 0.75 million hectares of forests as part of the Bonn Challenge. The Chittagong Hill Tracts (CHT) of Bangladesh contain almost one-third of the country’s state-owned forests and are home to 12 ethnic communities, whose livelihoods are dependent on forests. Although once rich in biodiversity, the majority of the forests in the region are highly degraded due to faulty management, complex institutional arrangements, and land disputes with locals. The CHT, therefore, represent the most promising region for ecosystem restoration through forest and landscape restoration (FLR). Here, using the secondary literature, we examine the current institutional arrangements and drivers of deforestation and forest degradation in the CHT region and potential benefits and modalities to make FLR successful in the region. Based on our study, we suggest that institutional reform is essential for successful FLR in the CHT. We also discuss key interventions that are necessary to halt ecosystem degradation and to secure community participation in natural resources management in the region.