The extent to which community forestry (CF) contributes to empowerment of local communities remains hotly contested. We develop a unified theory of empowerment at the intersection of asset-based agency and institution-based opportunity and apply it to examine the extent to which the implementation of CF has led to local empowerment. Our empirical data are drawn from review of national level policies and a field study of Ngare Ndare Community Forest Association (CFA) in Kenya. We investigated what types of powers were transferred to the local level, how representative the local institution was of the local community, and how its formation and composition affected the empowerment of socially and economically differentiated groups, with competing claims over the forest resource. We found that national forest policies and actors transferred minimal powers that enabled local communities to execute forest protection and conservation roles, while maintaining legislative powers and control of economic benefits centrally; and, that representation within the CFA was highly skewed in favor of small and already powerful local elites. We discuss the findings in the light of the literature on empowerment to develop insights about how to more effectively manage processes to empower local communities through appropriately representative institutions.