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Forests and pastoralism are in a state of crisis in the Borana lowlands in southern Ethiopia. State management has failed to control forest exploitation and past and present development interventions continue to undermine pastoral production systems. This paper shows how a fundamental misunderstanding of pastoral land management, and in particular pastoral tenure systems, has undermined traditional institutions and the environment for which they were once responsible. It describes the diversity of people and institutions that use or manage the Borana forests today and the challenges that this presents in attempting to develop a new system. It looks in particular at the relationships between customary institutions and more modern actors. It also presents the process by which these challenges are being addressed in order to establish a collaborative system of management for local forest areas, with a focus on socio-political solutions, in order to slow the rapid decline of pastoral livelihoods and systems.