Forests play an important role in the livelihoods of ethnic communities living in the south-eastern region, the Chittagong Hill Tracts (CHTs), of Bangladesh. Over decades, deforestation and land degradation have markedly affected ethnic peoples’ livelihoods in the CHTs. Although communities once managed extensive forest commons to support their livelihood needs, population explosion triggered fragmentation of common land leading to a gradual decline in livelihood opportunities. However, ethnic communities still manage the remnants of those once extensive common resources that are locally known as Village Common Forests (VCFs), which provide valuable resources for community use. An investigation was made of the role of forest income in livelihoods of selected VCF communities in Bandarban and Rangamati districts of the CHTs. Both quantitative and qualitative analyses were employed to examine the household livelihood system of the respondents selected at random from 7 villages. Data were collected through participatory rural appraisal and structured quarterly surveys. The contribution of all forest-related income was found to be much smaller (11.59 %) than that of agricultural income (77.02 %) in average total household income. However, VCFs provide bamboos, which are the largest source of household forest income. Moreover, they harbour rich native tree diversity which is vital for maintaining perennial water sources upon which most household livelihood activities depend. Therefore, it seems that rejuvenation of VCFs is crucial to support sustainable community livelihood in the CHTs. A strong political will is necessary to formalize the existence of VCFs in the land-use strategies for the CHTs.