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Madhupur National Park is renowned for severe resource ownership conflicts between ethnic communities and government authorities in Bangladesh. In this study, we applied the Institutional Analysis and Development framework to identify: (i) past and present informal institutional structures within the ethnic Garo community for land resource management; (ii) the origin of the land ownership dispute; (iii) interaction mechanisms between formal and informal institutions; and (iv) change in land management authority and informal governance structures. We identify that the informal institutions of the traditional community have undergone radical change due to government interventions with implications for the regulation of land use, informal institutional functions, and joint-decision-making. Importantly, the government’s persistent denial of the role of existing informal institutions is widening the gap between government and community actors, and driving land ownership conflicts in a cyclic way with associated natural resource degradation.