There is general consensus that resource-use strategies of recent migrants in tropical rainforests result in extensive deforestation and other negative environmental impacts. Less agreement exists about the nature and extent of the impact of indigenous and long-standing migrant communities living in rainforests. It has often been argued that the high value these communities place on local resources results in environmental conservation in areas under their control, but this is being increasingly challenged. The aim of this study was to contribute to this debate by comparing the regional environmental impact of indigenous and non-indigenous households in North-west Ecuador, with emphasis on tropical deforestation. The basic premise was that long-term resource-use strategies and related decision-making processes should be discernible as characteristic land-use patterns. Three indigenous and non-indigenous populations coexist in the study region, and demographic, land-use and historical sources of information were used to evaluate their relationship to regional deforestation in the period 1983-93. No significant differences were found in the recent deforestation associated with each group based on their cultural or ethnic background, although differences did exist in the past. The need to differentiate between a given environmental impact and the decision-making process behind it was also evident. In North-west Ecuador, markets, factors of production, and access to and control of resources, are key for understanding the environmental impact of local communities. Low-impact resource-uses often result from low-return productive activities in forest environments with low labour opportunity costs, high discount rates for income generated through activities compromising food security, and from uncertainty about future conditions. Environmental policy-making and programme design need to recognize this relationship. Conservation will be possible only if the perceived benefit to local users is greater than that of resource transformation, both of which respond to the dominant environmental, economic and social conditions at a given time and place. Creating or fostering the appropriate conditions should be a key objective of both.