This article analyzes the relationship between forest resources, refugees, and the host population. The findings of the research suggest that the host population are heavily dependent on the local forest for their daily needs such as fuelwood, timber, grazing area, fodder for domestic animals, foods, and medicine in addition to cultural and esthetic needs. The forest has also been relied upon for agricultural needs such as manufacture of agricultural tools, maintenance of irrigation water systems, erosion control, and fertilizer needs. The forest was under a sustained demand as any other Terai forest of Nepal. After the arrival of refugees in 1992, the demand for forest resources increased substantially. Initially, the construction of the refugee camps decreased the total forest area and also required some felling of trees. More significantly, the refugees themselves became active users of the forest resource, which generated extra pressure on the forest and created scarcity of forest resources. Before the arrival of the refugees, forest management and monitoring of illegal use of the forest resources were carried out by the government through its local forester office. The local residents were active users of the forest resources, but were passive in managing and maintaining the forest resource. However, competition from the refugees instilled a desire in the local population to safeguard and protect the dwindling resource against the external threat by creating the Humse Dumse Community Forest.