There are serious methodological and policy hurdles to be overcome in making integrated natural resource management effective in alleviating rural poverty while protecting environmental services in tropical watersheds. This paper reviews the development of an approach to integrate biodiversity conservation and agroforestry development through the active involvement of communities. The work was focused on the Kitanglad Range Nature Park in the upper reaches of the Manupali watershed in central Mindanao, Philippines. Kitanglad is one of the most important biodiversity reserves in the Philippines, and is one of the three global sites of the Sustainable Agriculture and Natural Resources Management (SANREM) Program. The Biodiversity Consortium at the Philippine site was composed of collaborating organizations including a university, NGOs, government agencies, and the International Centre for Research in Agroforestry (ICRAF). We developed technical innovations suited to the biophysical and socio-economic conditions of the buffer zone, including practices for tree farming and conservation farming with annual crops, that have been widely adopted. We also fostered institutional innovations to improve resource management. The elements were put in place for an effective social contract to protect the natural biodiversity of the Park. The knowledge base guided the development and implementation of a natural resource management plan for the Municipality of Lantapan. We assisted the development of a dynamic grassroots movement of farmer-led Landcare groups in the villages near the park boundary that has had significant impact on natural resource conservation in both the natural and managed ecosystems. The experience has been recognized as a national model for natural resource management planning and watershed management in the Philippines. Using an integrated natural resource management research framework, we are currently evolving a Negotiation Support System to resolve the interactions between the three management domains: The Park, the ancestral domain claim, and the municipalities.