Chittagong Hill Tracts (CHT), foothill of the Himalayan range, once covered with dense natural forests. Because of illegal logging, increased population density and intensified shifting cultivation forest coverage diminished drastically resulting land degradation that can be seen in the form of huge soil erosion, land slides and sedimentation. To combat the degradation and also to improve the living of hill people many independent development projects have been tried with a mixture of success and failure. Of the late, a comprehensive intervention with multiple components, the upland settlement program (USP), has been implemented since 1980s that is considered as a milestone to control land degradation and to improve the livelihood of the participating farmers. Drawing an empirical study, this research answers the question how the settlement model becomes successful in combating land degradation and enhancing people's living. To answer the question we collected information about how the program came into action from secondary sources, and primary data on land uses, tree coverage, incentives derived from the programs, social characteristics that facilitated program to be successful. Semi-structured interview, group discussion, direct observation, etc. were used to collect the evidences. Findings of the study indicates that immediate project incentives such as house construction, material support, physical infrastructure, etc., short terms benefits such as employment opportunities, income from agroforestry products, and long term employment and economic gain from rubber garden encouraged farmers to participate effectively with project. Regular monitoring by projects staffs and strong social cohesion among farmers made the project a success story. Social collective activity that generated community fund used for common development as well for helping needy farmers reduced dependency on direct project funds. Along with above positive attributes, the study also identified several constraints such as governance issues that require fair and justifiable solution to make the program more successful to control land degradation and to improve peoples` livelihood of the region.