The RUPES project in the Sumberjaya sub-district of Indonesia addresses both the degradation of the downstream water supply (from soil sedimentation and contamination) and the land conflict between the untitled farmers and the forestry department. In a region that has had a history of conflict over land rights, offering conditional land tenure (dependent on farmers maintaining existing natural forest stands and implementing sustainable agroforestry practices) is an effective mechanism to secure provision of watershed environmental services from upland farmers. Maintaining multistrata shade coffee gardens has potential to reduce erosion and sedimentation while also providing income to farmers. This RUPES project is also exploring reward mechanisms of direct payment from a downstream power company for demonstrated reduction in sedimentation.