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One consequence of the transition of rural communities from industrialised agriculture and natural resource extraction to sustainable development principles has been the rise of community-based natural resource management (CBNRM). CBNRM entails collaborative efforts, typically involving local, state and federal agencies, private firms and landowners, non-governmental organisations such as environmental and economic development groups, and watershed councils. There are no agreed-upon metrics or even broadly accepted approaches for assessing the effectiveness of these new institutions. A good deal of work has been done on evaluating collaborative processes and some on environmental outcomes, but almost none on the socio-economic effects of their activities. To help fill the gap we have been conducting a long-term action research project in Oregon, an analysis of the most effective approaches to the design and implementation of measures of the socio-economic health of communities in which watershed stewardship organisations are active. In this paper we present one case, a participatory process developing socio-economic measures for monitoring CBNRM. We describe the process and the resulting measures. It is expected that the measures will be systematically updated and tracked by the community over the next decade or more. The case study illustrates the necessity and challenges of developing measures for CBNRM that are locally meaningful.