This study compares community-based managed forests under different purposes of management, namely, state-driven "conservation" or community-designed utilization in two villages located in the Sopsai watershed, Nan Province, northern Thailand. The forest health under different intensity of uses is assessed in association with the collective behaviors and long-term purposes embedded in village social-cultural context. The study found no significant differences in forest succession and proportion in diameter at 1.3 m (dbh) class and height-class distribution of the forest under different use intensity. The forest for utilization also showed higher density and basal area of the local preferred species than the "conservation" forest. In the utilization forest, we also found a higher number of multipurpose and preferred species than in the "conservation" forest, which actually responded to the needs of the community in the long term to have more wood products (both firewood and timbers). The community-based forest management (CBFM) for utilization can also lead to natural regeneration and biodiversity similar to "conservation" forests. Through CBFM, forest resources can be managed to maintain the healthy condition under different intensities and respond to both community needs and external expectation. The findings also emphasize the importance of recognizing community needs and management objectives in watershed restoration and improving the productivity of forests under collective management.