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There has been a paucity of research on the impacts of small scale Payments-for-Environmental-Services (PES) projects in developing countries. The aim of this paper is to evaluate the household level impacts of a small scale agro-forestry based carbon sequestration project in rural Mozambique. In 2006, questionnaire based interviews were conducted quarterly of 290 randomly selected households in the buffer zone of the Gorongosa National Park in Mozambique. We used the propensity score matching technique to assess the PES-project impacts on household cash income, consumption expenditure, forest resource use and crop yields. We found that, in contrast to nonparticipant households, PES-participant households earned more cash income, incurred more consumption expenditure, collected less forest products and, harvested lower quantities of agriculture crops. In addition, we found, through …