Although community forestry (CF) in Nepal has been considered a successful program in terms of improving forest conditions, supporting forest-based livelihoods and enhancing local level community engagement, its exclusionary outcomes have been well documented. However, more focus has been given to the socio-cultural, economic and institutional factors at the community level as the causes of exclusion of women, Dalits, people living in poverty, and ethnic minorities. These marginalized groups are seen as being excluded from benefit sharing and decision making in CFUG as a result of community level elite capture and socio-economic attributes of marginalized groups themselves. Thus CF policy guidelines see Community Forest User Groups (CFUGs) as the main actors in addressing exclusion. Although recent studies have looked at the impact of external actors, power relations, and macro-level institutions on exclusion, not much attention has been paid to how secondary level organization, i.e. organizations that represent local level community organizations, understand and address or do not address exclusion. Taking the Federation of Community Forestry Users, Nepal (FECOFUN) as a case study of such an organization, this study looks at how FECOFUN sees itself in relation to exclusion in CF. Through its elaborate organizational network at multiple levels FECOFUN has strengthened the community forestry movement in Nepal, challenged the forestry sector’s techno-bureaucratic hegemony, and democratized forest governance. This study provides an analysis of various perceptions of exclusion within FECOFUN, and how these perceptions shape FECOFUN’s role. Research methods used were primarily qualitative. Data was collected primarily through 26 semi-structured interviews and secondary data in the form of documents and reports from FECOFUN. Coding was done for concepts and themes most closely related to the research question and concerns as suggested in existing literature, along with identification of emerging concepts and themes from interview data wherever appropriate. Coded data was analyzed by sorting, comparing, and combining coded data units within and across the interview data to identify patterns and linkages. The study found that there were significant differences in the way local level officeholders interviewed and those at the district and national level of FECOFUN understood exclusion in CF. At the local level FECOFUN, there was more focus on equal distribution of forest products, equal involvement in CF activities, and proportional representation. They see inclusion as happening and not a problem. Officeholders in the later levels spoke of proportional representation, equitable benefit sharing and involvement of marginalized groups in decision making. They recognized elite control at the CFUG level as a cause of exclusion. Some of the reasons for this difference could be due to lack of resources and training in the lower levels of FECOFUN, and lack of adequate interaction between its various levels. The study further argues that because of the dominant understanding of exclusion in CF and because of FECOFUN’s dependence on powerful actors like donors and forestry sector for resources, it is unable to challenge the role these actors play in sustaining exclusion.