Coastal environments are some of the most productive ecosystems in the world. They are rich areas for harvesting food and also serve for transportation, tourism and waste disposal. However, overpopulation, conflicting economic demands and environmental degradation have increased the stress on coastal resources, making critical the need for alternatives to conventional management practice. Generally, local people have been involved only in the'exploitation'of coastal resources and they have had little say or control over'resource management'. There is broad agreement that community participation and commitment greatly enhances the effectiveness of development projects (Korten, 1990, 1995; White, 1987; Max-Neef, 1991; Hellinger, 1988; Smillie, 1991). In many cases, the proper utilisation of resources depends upon the local people's knowledge of the delicate nature of these resources (CCIC, 1995). Thus, active community participation in all stages of development projects will often have a highly positive impact on the project's sustainability and on the protection of coastal resources and habitat which are essential for the survival of coastal communities (CIDA, 1988). However, there is often a lack of consensus on what is understood by" Community Participation," and perhaps as a consequence, the anticipated results of projects claiming to incorporate this strategy are frequently not realised. This study examines the issue of effective community participation in coastal development projects. Specifically, it has explored the similarities and differences between project functionaries and local community people in terms of their perceptions of what constitutes effective community participation. The methodology employed includes the grounded theory approach involving direct observation, review of documents and in-depth face-to-face interviews with members of both groups. There are substantial differences among the beneficiaries and functionaries in relation to their perception of what constitutes effective community participation in coastal development projects. Likewise, similarities among the beneficiaries and functionaries of the development projects were also evidenced. The findings of the study suggest that effective community participation is a joint venture of the beneficiaries and the functionaries of the development projects. The study concludes with an effective facilitative model which emphasizes both'bottom up'and'top down'approaches to realize community participation in development projects.