Summary ‘Community?based sustainable development’ has become central to the development rhetoric of the new South Africa, whereby local communities are expected to be involved in decisions from which they were previously excluded. But how do such processes work in practice, especially where conflicts over resource use are much in evidence? Through a case study of the Mkambati area of the Wild Coast in the Eastern Cape, this article explores how the interaction of social and ecological dynamics affects the livelihoods of the rural poor who live near protected conservation areas. Through the use of an environmental entitlements analysis, the case study shows how different social actors derive livelihoods from a range of natural resources and how access to and control over these resources is mediated by a set of interacting and overlapping institutions which are embedded in the political and social life of the area. An understanding of this complex set of institutional relationships is seen to be a vital precursor to establishing a framework for negotiation around competing claims, and the exploration of any co?management options for the nature reserve area.