Protected areas (PAs) are central to sustainability targets, yet few evaluations explore outcomes for both conservation and development, or the trade‐offs involved. We applied counterfactual analyses to assess the extent to which PAs maintained forest cover and influenced well‐being across >31,000 villages in Sumatra and Kalimantan, Indonesia. We examined multidimensional aspects of well‐being, tracking education, health, living standards, infrastructure, environment, and social cohesion in treatment and control villages between 2005 and 2018. Overall, PAs were effective at maintaining forest cover compared to matched controls and were not detrimental to well‐being. However, impacts were highly heterogeneous, varying by island and strictness of protection. While health, living standards, and infrastructure aspects of well‐being improved, education access, environmental conditions, and social cohesion declined. Our analysis reveals the contexts through which individual PAs succeed or fail in delivering multiple benefits and provides insights into where further on‐ground support is needed to achieve conservation and development objectives.