The traditional resource use structure in Himalaya has transformed considerably during the recent past, mainly owing to the growth of population and the resultant increased demand of natural resources in the region. This transformation in resource use practices is particularly significant in the densely populated tracts of Himalaya. As a result, cultivated land, forests, pastures and rangelands have been deteriorated and depleted steadily and significantly leading to their conversion into degraded and non-productive lands. These rapid land use changes have not only disrupted the fragile ecological equilibrium in the mountains through indiscriminate deforestation, degradation of land resources and disruption of the hydrological cycle, but also have significant and irreversible adverse impacts on the rural economy, society, livelihood and life quality of mountain communities. It has been observed that the agricultural production has declined, water sources are drying up fast due to decreased ground water recharge and a large number of villages are facing enormous deficit of critical resources, such as food, fodder, firewood and water, mainly due to unabated deforestation. As a result, the rural people, particularly the women, have to travel considerably long distances to collect fodder and firewood and to fetching water. It is therefore highly imperative to evolve a comprehensive and integrated land use framework for the conservation of the biophysical environment and sustainable development of natural resources in Himalaya. The land use policy would help local communities in making use of their natural resources scientifically and judiciously, and thus help in the conservation of the biophysical environment and in the increasing of the productivity of natural resources. The study indicates that conservation of forests and other critical natural resources through community participation, generation of alternative means of livelihood, and employment in rural areas can help increase rural income as well as restore ecosystem services.