Focusing on Malawi, this study examines struggles to bring people back into protected forests to enhance sustainable forest management and livelihoods using insights emerging from a co-management project in Malawi. It uses mixed social science methods to analyse continuing local forest-user commitment to co-management despite conservation burdens largely for minimal financial benefits. It argues that overemphasis on cash incentives as the motivation for ‘self-interested’ users to participate in co-management overlooks locally significant non-cash motivations, inflates local expectations and creates perverse incentives that undermine socio-ecological goals. In fact, some non-cash incentives outweighed cash-driven ones and therefore the findings support broadening of incentives mechanisms. Insights on forest-management planning, fair cost-sharing, targeting the poor and the need for social learning are also highlighted.