This paper explores the contribution of forests to the livelihoods of local communities in Kenya. The paper uses survey data to explore resource extraction and the economic reliance of households on forests. The results suggest that both rich and poor households depend on forests, and that membership in forest user groups, and therefore participation in forest activities, may be based on a household's monetary rather than asset income. The results imply that forests support the living standards of the poor through the diversification of household income sources. The econometric results point to the role of household heterogeneity in private resource endowments in influencing dependence on forests. Participation in collective action and farm size are also significant determinants of forest dependence. The results call for a balanced policy approach to forest management that facilitates both access to forests by poor households and forest conservation.