Campaigners have criticised a pilot programme that allows villagers to live in the forest as long as they care for the environment, arguing that it does not give land tenure security.
More than 50,000 residents of 22 villages who live in the forests of the northern province of Loei will not be evicted or penalised if they agree to protect the forest under the newly launched Land Allocation scheme, officials said.
Conditions include reserving a fifth of the land for planting trees, and reducing their use of chemical fertilisers and pesticides, said environment minister Surasak Karnjanarat.
"Only communities with a proven track record of protecting the forest will be allowed to stay," Mr Surasak told reporters.
"This is a new approach to community management - villagers and officials must work together to protect the forest. Forcing them from the forest is not the right decision," he said.
Indigenous and local communities own more than half the world's land under customary rights. Yet they only have secure legal rights to 10%, according to Washington D.C.-based advocacy group Rights and Resources Initiative.
Campaigners have long called for amending the 1961 National Park Act to protect villagers and indigenous people from being evicted from land they consider theirs by birthright, because of disputes over ownership.
Campaigners say evictions have risen since the military government passed a forest reclamation order in 2014, which authorities say is essential for conservation.
The Forest Allocation scheme does not grant ownership rights, so there is no security of tenure, said Wiron Ruchichaiwat, a community organiser in Loei province.
"We have always cared for the forest. Now, we have to prove we have always lived here, and do what the officials ask us to do - and even then there is no guarantee we will not be evicted," she told the Thomson Reuters Foundation on Wednesday.
"Instead, the government should give us a collective title."
Officials have delayed granting collective titling, say campaigners who led street protests earlier this year, demanding rights to forest dwellers and an end to industrial projects on farmland.
The Cabinet has passed a draft Community Forest Bill which also encourages public participation in managing forests.
More than 3 million families could benefit from the programme, which will cover more than 2.5 million hectares (15.6 million rai) of land, officials said.
But it only covers reserve forests, and not national parks, from where villagers are being evicted, campaigners say.