Mongolia?s forest coverage is 8.2 % only. Wood is widely used for fire making, specially in the countryside. From the above two basic facts it is seen that trees are essential for the country for its future development and survival of local communities and biodiversity. Mongolia used to experience the raising of tree seedlings in many state owned nurseries in the recent past. Unfortunately, more than 80 % of the tree nurseries couldn?t survive the current severe economic transition into a market system. Therefore, it is now vital to establish community based/owned tree nurseries. It means more sustainability is ensured once nurseries are community based/owned. The grant is supporting a community initiative to establish a tree nursery which will further contribute to re-forestation of a small river watershed area where the community lives. The nursery has been established in the left bank of upper stream Huiten river. Four types of tree seedlings are being raised from seeds. From next spring of 2006, some 50,000 seedlings will be sold, making about US $ 1100 income to the community.