In tropical forest regions throughout the world, forest fires are a major risk to the well-being and sustainable livelihood of rural communities. The Chimalapas region is one of the priority conservation areas in Mexico since it is one of the country's most important sources of water, supports exceptionally diverse ecosystems and species of flora and fauna. Unlike in temperate conifer forests, fire is extremely rare in the Chimalapas cloud forests, but after the 1998 fire events, forest fires are a constant threat in the region. These fires result from the indiscriminate use of fire in agricultural activities as well as from natural events (lightning). Changing climatic conditions (an extremely dry season and the related El Nino phenomenon) potentially linked to global warming greatly increased the likelihood of fire. Perceived and actual threats of forest fires on a community's 'natural capital' are influenced by conditions of other community capitals: human, social, cultural, political, financial and built. Data were collected through in-depth, semi-structured interviews and focus group, participant observations, and meetings, and systematic document reviews in order to analyze and compare how local people and external stakeholders perceive natural capital and potential threats to the various community capitals. My results suggest that the occurrence of severe fires caused an imbalance among the community capitals, driven by changes in social-environmental relations. Increased pressures from external interests (i.e., protected area establishment, researchers) threatened control by local communities over their natural resources. These analyses suggested a 'domino effect', in which an impact on one major community capital (natural) through a severe disturbance event (fire) escalated to effect all other community capitals (built, financial, social, human, cultural and political). I mapped the main stakeholders' responses to the domino effect of the forest fire events, as well as the subsequent process of negotiating control and the relevance of the knowledge jointly created during a participatory process in rural community development. Process of 'spiral down' and 'spiral up'---by which community capitals either continue to degenerate or are regained and revitalized through transformative processes---are discussed with relation to maintaining healthy communities and ecosystems.