This paper presents a case study from Mount Elgon National Park, Uganda, examining and deepening an understanding of direct incomes and costs of conservation for local people close to protected areas. In the early 1990s, collaborative arrangements were introduced to Mount Elgon National Park to improve people-park relations and enhance rural livelihoods after a period of violent evictions and severe resource access restrictions. In areas with such arrangements – including resource access agreements, Taungya farming, and beekeeping schemes – we observe a marginal increase in annual incomes for involved households. Other incomes accrue from tourism revenue sharing schemes, a community revolving fund, and payments for carbon sequestration. However, these incomes are economically marginal (1.2% of household income), unevenly distributed and instrumentally used to reward compliance with park regulations. They do not necessarily accrue to those incurring costs due to eviction and exclusion, crop raiding, resource access restrictions and conflicts. By contrast, costs constitute at least 20.5 % of total household incomes, making it difficult to see how conservation, poverty alleviation and development can be locally reconciled if local populations continue to bear the economic brunt of conservation. We recommend a shift in policy towards donor and state responsibility for compensating costs on a relevant scale. Such a shift would be an important step towards a more substantive rights-based model of conservation, and would enhance the legitimacy of protected area management in the context of both extreme poverty and natural resource dependence.