ABSTRACT: Degradation and deforestation are among the major environmental problems facing forests in Tanzania. The country has undertaken deliberate efforts to device mechanisms to address the environmental problems in the country. One of the remarkable actions is decentralization and privatization policies in the 1990s that pave way for local people to participate in the management of forest resources by recognizing that local people are better placed to manage their resources efficiently. The main focus of this paper was on determining how the national environmental policy (NEP 1997) and Environmental management Act (EMA 2004) have been reflected in the village decisions related to environmental management, taking a case of some villages close and far from Mount Uluguru Nature Reserve forests. The paper found that, there is poor knowledge of environmental laws (national law as well as villages’ by-laws), very low villagers’ involvement in by-law formulation process, which goes together with poor willingness of people to participate in the environmental activities, as well as long processes in formulating these by-laws. Based on these, the focus should be given to awareness programs at village level, also the by-laws drafts should be treated with urgency by top district authorities so as to crown efforts done by villagers and the supporting stakeholders.