Forest biodiversity and its role in community development and livelihood improvement was studied in Chitral and Swat districts of Pakistan. Five species of morels were recorded in Mankial valley including Morchella conica Pers., Morchella esculenta Fr., Morchella delociosa Fr., Morchella rotunda (Pers.) Boud., Morchella semilibera DC., in Mankial valley District Swat. The total annual production of dried morels was 334 kg and market value was Rs. 5999000/- in Mankial, Rs. 6609000/- at Mingora and Rs. 9130000/- at Islamabad during 2016. The Morchella species are collected for own uses and marketing and 97% of the morels are marketed while the remaining 3% are used as food or folk medicines. The highest population of markhor (Capra falconeri falconeri Wagner) was noted at Toshi Shasha conservancy Chitral with 1455 individuals during 2016 followed by 522 animals in Gehret Goleen conservancy Chitral during 2012 and 62 animals in Mankial valley district Swat during 2015. The total income was 3.473 million US $ from markhor (Capra falconeri falconeri Wagner) trophy hunting during 1998 to 2016 in Khyber Pakhtunkhwa, out of which 20 % amounting 0.69486 million US $ were kept by the government as token money while 80 % amounting 2.7794 million US $ were paid to the community as their share while in Toshi Shasha conservancy Chitral the income was found Rs. 31.188 million in 211-2012, Rs. 36.137 million in 2012-13, Rs. 47.983 million in 2013-14 and Rs. 61.385 million during 2014-15. The community spent an amount of Rs. 3.083 million in 2011-2012, Rs. 4.397 million in 2012-2013, Rs. 5.009 million in 2013-2014 and Rs. 9.819 million during 2014-15 on community development and livelihood improvement through implementation of 50 community projects. The physical, climatic and chemical parameters of morels habitat in Mankial valley Swat were also studied and elemental, nutritional analysis were carried out. Phytosociological attributes including plant abundance, frequency and crown density in the study area were also carried out.