This paper focuses on the interplay between environmental narratives, identity politics and the management of forest resources in Madagascar. While efforts to conserve the island's biological diversity have centred primarily on the designation of protected areas, policies have increasingly focused on local communities. The experiences of the last 20 years have shown that community-based approaches to conservation offer considerable challenges due to the complex politics of natural resource use, which involve multiple and diverse stakeholders, often with very different and sometimes conflicting values. In this paper, I focus on the environmental perceptions and values of two groups in the Central Menabe region of western Madagascar – conservation organisations and rural households – revealing a contrasting set of views regarding the region's forest. I show that the conservation discourse has changed over time, increasingly emphasising the biological diversity of the region's tropical dry-deciduous forest and prioritising non-consumptive uses of natural resources. Although policy has changed in response to changing values, I show that it has been underpinned by the notion that hatsake (‘slash-and-burn’ agriculture) is an irrational practice driven by necessity rather than choice. Policy has thus sought to provide livelihood alternatives, firstly through forestry, then through changes in cultivation and increasingly through tourism. This misunderstands the local view of the forest, which sees hatsake as a way to make the land productive, as long as it is carried out responsibly according to local fady (taboos). As well as facing problems of translating conservation goals into local values and misunderstanding the motives for forest clearance, policy has been based on a narrative that attaches particular land use practices to ethnic identities. I argue that this ignores the history and fluid reality of both identity and land use.