Watershed management projects, especially in developing countries under pressures of rising populations, present peculiar challenges in design and evaluation, because they aim to produce specific physical outcomes through socio-economic actions. Efforts to reduce human-induced soil losses, without displacing the relevant communities, need time and persistence, because such efforts must involve persuasion, rather than direction, of the communities towards both different styles of socio-economic behaviour and new land-use practices. In tropical and subtropical environments, several encouraging successes in community-based projects of this kind have been reported over the last 10-15 years. Such projects address multiple goals: reducing soil loss, increasing dry-season flows, reducing floods as well as improving the economic value of land and livelihood of people. Therefore, such projects must be multi-dimensional and multidisciplinary, acid these considerations have time and cost implications. In these circumstances, evaluation of project packages is necessary though difficult. Developing better insights into the benefit-cost effects of their various characteristic components would be valuable. Identifying and quantifying intermediate benefit targets are desirable, since the apparently slow rate of delivery of intended ultimate benefits may lead to "fatigue" and weakening of support from funding agencies; this, in turn, can lead to some displacement of objectives, or to substitution of more modest objectives. Persistence of funding support may, on the other hand, be enhanced by establishing programmes of continuous evaluation, internal to such projects. This paper discusses the methodologies of monitoring and evaluation programmes that focus primarily on measuring the physical results that are due to promoting socio-economic actions and adjustments of land-use behaviour within the community.