In this paper, we estimate the impact on local household livelihoods of the Natural Forest Protection Programme (NFPP), the largest logging ban programme in the world that aims to protect watershed and conserve natural forests. In doing so we use a series of policy evaluation micro-econometric techniques to assess the impacts of the NFPP on two interrelated facets of household livelihoods, namely income and off farm labour supply. We find that the NFPP has had a negative impact on incomes from timber harvesting but has actually had a positive impact on total household incomes from all sources. Further, we find that off farm labour supply has increased more rapidly in NFPP areas than non-NFPP areas. This result is strongest for employment outside the village. On the basis of these results policy implications for household livelihoods are drawn.