Indigenous people have widely been blamed for degrading South Asia's montane forest resources through the practice of shifting cultivation, yet some studies have revealed that indigenous people used forests in a sustainable way for centuries until external intervention. The history of external intervention in the forests of South Asia is more than two centuries old. The process of degradation of forest resources requires understanding of the political and social processes that condition access, control and management of the land and resources involved. The Chittagong Hill Tracts (CHT) of Bangladesh, a part of the Himalayan region, underwent essentially the same socio-political and historical processes as many other countries in the region and had very similar experiences in forest management. By examination of policies and associated effects on CHT forest over the past two centuries, this paper reveals that the process of forest degradation in the CHT started during the British colonial period with the nationalization of forests, establishment of reserve forests (RFs), management of forests by government agencies and weakening of traditional institutions. The process of degradation was accelerated by: privatization of forest land for the promotion of sedentary agriculture, horticulture and rubber plantation; the construction of a hydraulic dam on the Karnafuli River; the settlement of lowland people; and the constant conflict between indigenous people and the Forest Department. The degradation of CHT forests is not only the result of traditional agricultural practices, but also of many other factors including inappropriate policies and programmes.