Despite the local and global importance of forests, deforestation is driven by various socio-economic and biophysical factors continues in many countries. In Nepal, in response to massive deforestation, the community forestry program has been implemented to reduce deforestation and support livelihoods. After four decades of its inception, the effectiveness of this program on forest cover change remains mostly unknown. This study analyses the spatial and temporal patterns of tree cover change along with a few socio-economic drivers of tree cover change to examine the effectiveness of the community forestry program for conserving forests or in reducing deforestation. We also investigate the socio-economic factors and policy responses as manifested through the community forestry program responsible for the tree cover change at the district level. The total tree cover area in the year 2000 in Nepal was ∼4,746,000 hectares, and our analysis reveals that between 2001 and 2016, Nepal has lost ∼46,000 ha and gained ∼12,200 ha of areas covered by trees with a substantial spatial and temporal variations. After accounting socio-economic drivers of forest cover change, our analysis showed that districts with the larger number of community forests had a minimum loss in tree cover, while districts with the higher proportion of vegetation covered by community forests had a maximum gain in tree cover. This indicates a positive contribution of the community forestry program to reducing deforestation and increasing tree cover.