A large number of research studies in Nepal have shown the potential of non-timber forest products (NTFPs) in reducing poverty. As more than one-third of government-managed forests have already been transferred to local communities for management and utilization, this might open new opportunities for commercial management of NTFPs in community forests. This study investigates how NTFPs are being managed commercially in community forest user groups (CFUGs) and the role of NTFPs in poverty reduction. The data were collected from three CFUGs of Dolakha district of Nepal, using both quantitative and qualitative approaches. The major data collection methods employed were key informant interview, household interview, focus group discussion and field observation. Qualitative data were analysed using the qualitative software Atlas.ti 5.0, whereas quantitative data were analysed using the Statistical Package for Social Science 15.0. The results show that the role of external agencies is vital for low elite domination and execution of pro-poor programmes in CFUGs. In addition, organizing marginalized users into groups and building their capacity help to access the benefits of community forests. The study emphasizes de facto inclusion of representatives of marginalized members of groups in their executive committees to increase their influence over the committees decisions so as to ensure egalitarian access over resources. Likewise, poor and female-headed households are the most disadvantaged in a weak marketing environment. Despite the importance of NTFPs for rural livelihoods, existence of market assurance for timely sale of NTFPs at reliable prices is a determining factor in considering NTFP collection as a lucrative work. Likewise, reduction of rural poverty through NTFP management is possible if an enabling policy environment for establishing NTFP-based enterprises exists in those areas and if such enterprises are established.