While community forestry (CF) is increasingly promoted as a climate change adaptation strategy, few analyses have examined the contribution of CF to adaptive capacity. We used a sustainable livelihood approach and Ostrom’s design principles for managing commons, to assess how CF confers climate change adaptive capacity in two communities in Myanmar. Our findings indicate that CF provides tangible contributions to human and social capital, by increasing landless and female forest users’ knowledge of forest management. However, CF has yet to enhance the physical, financial, and natural capital within these communities. The major challenges preventing the enhancement of socioeconomic benefits include limited community participation and weak institutional systems for monitoring and conflict resolution. We argue that CF increases community engagement in natural resource management, but in the absence of effective monitoring and decision-making, socioeconomic benefits to communities from CF programs may be limited. Our results elucidate important factors limiting the uptake and progress of CF as a viable climate change adaptation strategy in Southeast Asia, and indicate that comparative research is needed to better understand the factors that influence CF efficacy in forest- and natural resource-dependent communities globally.