ABSTRACT Millions of people live in and near forest domains, but have no officially permitted right to their homes, lands or livelihoods. FRA, 2006 recognises forest dwellers'' rights and makes conservation more accountable. According to 2011 census report, Tribal population is 104.3 millions and constitute 8.6% of total population, which is 8.2% in 2001. There were 2, 57,226 forest cases pending against tribals between 1953 to 2004 under Sections 26, 33 and 41 of the Indian Forest Act 1927 pertaining primarily to illegal felling of trees for domestic use and ferrying of wood by bullock carts. The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, are a major opportunity to strengthen economic, political empowerment and social security of tribes and other forest dwellers. The present paper is an attempt to examine the status of forest Act, 2006 in India with reference to tribal problems. The attempt has also been made to assess the major challenges which are coming during the implementation of this Act and the preservation of sustainable livelihoods of the tribes and other traditional forest dwellers. The paper also highlighted the relevance and validity of forest act, 2006. The findings suggest that Indian policies are well designed but worst implemented. FRA, 2006 is a very good effort to serve the marginalized tribal communities. But, in order to make this Act a boon, more efforts are needed. It requires strengthening of the forest dwellers'' rights, makes conservation more accountable and more transparent.