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Abstract Across the globe, the legal land rights and tenure of many Indigenous peoples are yet to be recognized. A growing body of research demonstrates that tenure of Indigenous lands improves livelihoods and protects forests in addition to inherently recognizing human rights. However, the effect of tenure on environmental outcomes has scarcely been tested in regions with high development pressure, such as those with persisting forest–agriculture conflicts. In this paper, we conduct an event study and a difference-in-differences analysis to estimate the average treatment effect of land tenure on forest cover change for 129 Indigenous lands in the Atlantic Forest of Brazil from 1985 to 2019. We found that forest outcomes in Indigenous lands improved following tenure compared to pretenure and that forest outcomes improved in tenured compared to nontenured lands. We also found that formalized tenure, rather than incomplete tenure, was necessary to improve forest outcomes. Our study is the first rigorous analysis of the effect of tenure on Indigenous lands in the globally important Atlantic Forest biome and contributes to a growing body of literature on the role of rights-based approaches to conservation. The evidence presented in this study may support efforts to secure the legal rights and autonomy of Indigenous peoples.