We established an evaluation framework for sustainable forest management (SFM) development based on locals’ perspectives using the importance-performance analysis (IPA) method in a rural area of Taiwan. It identified the factors that affected local people’s participation in and awareness of SFM based on local demographics, development factors of SFM, and perceptions of SFM, through the logistic regression method (LRM). Both the levels of importance and performance (I-P) of the SFM indicators were rated by the local residents and the differences between importance–performance among indigenous and non-indigenous people were examined. The factors that affected differentiation of local people’s participation in the SFM program were: (1) forestry workers, (2) indigenous people, and (3) SFM development factors. The findings provide both theoretical constructs and policy implications for SFM mechanisms for the forest stewardship council (FSC) and sustainable development goals (SDGs) in a sustainable rural development.