In this paper, we describe the process of establishing dry season grass reserves, traditionally known as kalo, among Kereyu and Ittu pastoralists of Fentale in the Awash Valley of eastern central Ethiopia. The data were primarily collected using qualitative research methods such as key informant interviews, group discussions, field observations, and records of community meetings and non-governmental organization (NGO) project reports. In the last decade and a half, several attempts were made by NGOs and local governments to encourage pastoralists to revive their traditional practices of setting aside grass reserves for seasonal grazing, but only a few such private enclosures were established. Even these private enclosures remained sources of conflict among community members until the severe drought of 2002. In response to events associated with the drought, community leaders, with the support of government and NGOs, mobilized local communities to establish both private and communal grass reserves for dry season grazing. The unusually good rains in the summer of 2003 resulted in high pasture production in the reserves that had not been observed for several previous decades. Stimulated by this positive event, communities attempted to expand this community-based pasture management system with varying degrees of success. While this initiative indicated that degraded rangelands can recover with appropriate management practices, and that increased rangeland productivity can significantly improve the livelihood of pastoralists, setting up appropriate institutional mechanisms for the sustainable management of pasture remains a challenge.