Game Management Areas in Zambia aim to combine nature conservation with economic empowerment of rural households. This study determines the impact of community-based wildlife management and participation in related community institutions on household welfare. The results indicate that the gains from living in Game Management Areas and from participating in natural resource management are large but unevenly distributed. Only Game Management Areas with limited alternative livelihoods exhibit significant consumption benefits. However, the gains accrue mainly to the relatively well off, while the poor do not gain even if they participate. The results also show that infrastructure development does not necessarily translate into household level consumption gains in the short run. The design of community-based natural resource management programmes needs to respond to the inherent diversity among both the national parks and the community members. There is a need to address impediments to effective participation by the majority of the community members.