Community-based conservation (CBC) has re-emerged as an alternative to the failures of state-controlled conservation. Participation of local communities and traditional knowledge are central to the CBC concept. Although various participatory approaches have been used, few studies have reviewed the effectiveness of these approaches, particularly in achieving both conservation and livelihoods objectives. This paper analyses our own cumulative experience with participatory approaches in order to help improve general practice. We specifically report and analyse the merits and limitations of two approaches that we used in Indonesia: problem-solving (PS) and appreciative inquiry (AI). While CBC is rooted in local communities' knowledge and practices, most rural people in Indonesia lack confidence in their own potential, and are worried about being labelled ‘old fashioned' if they maintain their traditions. Problems in managing natural resources should indeed be understood both by external actors and local stakeholders. However, using problems as the primary basis for formulating actions (the PS approach) exacerbated the tendency of communities to be highly dependent on external assistance and led to poor and slow progress. On the contrary, AI proved to be a powerful way to build the self-confidence and self-reliance of rural people, stimulated creative and innovative strategies, motivated active rather than simply nominal participation and helped sustain participatory and efficient processes.