Large scale clearing of natural forests for human settlements as well as in the form of tea, rubberand cinnamon plantations resulted forest fragmentation in most natural ecosystems in the wet zone of SriLanka which posed massive threats to both nature and the humans including the loss of biodiversity,environmental hazards and increasing poverty. This paper discusses about the potential to develop ruralgreen economy as a result of consolidating these agricultural lands into analog forests as a sustainableland use practice. Bangamukande Estate, a man-made analog forest in Galle District was selected for thisassessment. Participatory rural appraisal methods were used to obtain information on resource utilizationby the local community in nearby villages. Secondary data of the long term analog forestry establishmentprogramme were also used for analysis the livelihood changes of the people due to the impacts thissystem. Various interventions had been made to address the issues such as encouraging local farmers tocultivate timber, fruits, spices and medicinal plants, paying them for the environmental services theyrender and enhancing their income through green employment. The introduction of new sustainableagricultural activities such as bee keeping and planting fruits resulted in the production of value addedfarm products and organic fruits to be sold in the market. Through environmental based tourism activitiessuch as providing food and accommodation, eco-guidance, and assisting environmental research, thestakeholders are earning a better income supporting the development of a green economy in the country.