Southeast Asian countries have fairly extensive tropical forests. Unfortunately, many countries in the region such as the Philippines, Thailand, and Malaysia, not to mention Indonesia, have experienced severe deforestation since the second half of the twentieth century, leading to a natural resource crisis. The most severe deforestation occurred between the 1960s and the 1990s and persists today. This was largely caused by government policies that pushed for timber export. As a result, forest cover in this region decreased dramatically from 60% in the 1960s to just 30% in the 2000s. Such negative developments have encouraged governments to issue logging bans to prevent further deforestation and shift production from natural to planted forests. Community-based forest management (CBFM), which incorporates social capital such as myths and local knowledge, is a program implemented by the government. This chapter is based on field research conducted in the Cordillera and Palawan regions of the Philippines and Chiang Mai in Thailand, two Southeast Asian countries where forests are well managed by different ethnic groups who have lived in harmony with the forest for centuries. The aim of the chapter is two-fold: to describe and to analyze how social capital and civil society are incorporated into CBFM. Its novelty lies in its demonstration of how the unique socio-cultural combination of social capital and indigenous knowledge incorporated in CBFM programs has enabled these countries to manage forests sustainably.