Development has been conventionally defined as directional change towards nationally organized economic growth. Currently, however, with the emergence of the global marketplace, the focus of development efforts has gone from nationally organized to globally organized economic growth (McMichael 2000). Bhattacharyya (2004) defines community development as the process of creating or increasing solidarity and agency. Community development involves building the capacity of people, encouraging them to create their own dreams and learn new skills and knowledge.;There are three community development issues that can impact the direction community development practice might take: structure (social practices and organizations: social capital), power (relationships with those who control resources: political capital) and shared meaning (social meaning: cultural capital) (Hustedde and Ganowicz 2002). According to Pichon et al. (1999), in Latin America development towards economic growth has focused on the top-down dissemination of modern technology that was presumed adapted to any type conditions. The process of modernization in rural Latin America was an attempt to "improve" people's quality of life and standard of living. However modernization can set development against preservation of the environment (Pichon et al. 1999) natural capital. Given the evident failure of many countries to achieve development through the adoption of "modern" technology provided by first world countries, and the growing worldwide awareness of the pressure being put on the environment, the development project is shifting by bringing sustainability to the foreground (McMicheal 2000).;Rural communities in Latin America are experiencing a modernity that stresses the individual rather than community values. This focus led to changes in social stratification and increased social mobility produced by urbanization (Roberts and Woods 2005). The challenge faced by development processes is to put sustainability in the forefront combining "modern" knowledge with "traditional" knowledge and recognizing the importance of community in building development strategies to achieve sustainability, thus the importance of the idea of community development linked with sustainability. Strategies to curb environmental threats have been incorporated in to the development agenda (Chambers 1997, Dunlap et al. 2002, Martens and Rotmans 2002, McMichael 2000, Roberts 2005, Edwards 1994, Kaimowitz et al. 1999). One such strategy is that of community-based conservation (Agrawal and Gibson 1999). But, as Chambers (1997) points out, adoption of such strategies involved the revaluation of traditional knowledge within community as well as a willingness of outside agents involved in the development process to learn from local people.;My research looks at one rural peasant community in Peru, the community of Colpar, and analyzes ten years of participatory community development during which members of the community have engaged in actions directed towards more sustainable livelihoods. I use the community capitals framework to analyze the state of each capital in the community at different periods in time. The community capitals framework (CCF) developed by Flora et al. (2004) focuses on natural, human, social, financial, built, cultural and political capitals; availability and distribution of assets within and among communities, and the interaction between these different types of capitals in adding to or detracting from each other. As the same authors point out, this framework can also be a method of determining stratification and exclusion by looking at the structure of opportunity that emerges from the availability of or lack of access to resources/capitals. Thus, the CCF is a useful tool for analyzing social changes in the community (and at household level thus taking into account heterogeneity) as related to their ability or lack of ability to invest or build certain assets to respond to external or internal events.;My study analyzes the sustainability of holistic participatory community development in the face of modernization and facilitated mainly by Grupo Yanapai, a non-government organization working in the area for the last twenty years utilizing participatory action-research methodology. I look at the capacity of the community to face constant socio-economic change (positive and negative) due to modernization.;I use Bhattacharyya's (2004) and Hustedde and Ganowicz's (2002) definitions of community development to guide my analysis of the different processes that took place in the community of Colpar. Results from this research can be used to learn more about the sustainability of development processes in the face of modernization in peasant rural communities taking into account nestedness and heterogeneity within community.