Evolutionary analyses of the ways humans manage natural resources have until recently focused on the costs and benefits of prudent resource use to the individual. In contrast, the fields of environmental resource management and sustainability focus on institutions whereby successful practices can be established and maintained, and the extent to which these fit specific environmental conditions. Furthermore, recent theoretical work explores how resource conservation practices and institutions can emerge through co-evolutionary processes if there are substantial group-level benefits. Here we examine the design of a prominent yet controversial institutional intervention for reducing deforestation and land degradation in the developing world (REDD+), and its ongoing implementation on Pemba Island (Zanzibar, Tanzania) to determine the extent to which the features of REDD+ might allow for the endogenous adoption of sustainable forest management institutions. Additionally, we consider factors that might impede such outcomes, such as leakage, elite capture, and marginal community participation. By focusing on prospective features of REDD+ design that could facilitate the spread of environmentally sustainable behavior within and between communities, we identify distinct dynamics whereby institutional practices might coevolve with resource conservation practices. These insights should contribute to the design of more effective forest management institution in the future.