Communal lands covers a surface area of 1 million hectares in the Galicia-North Portugal region (northwest Iberian Peninsula). The average size of this land ownership type is 500 ha in Portugal and 200 ha in Galicia. The region has a Gross Domestic Product (GDP) lower than other developed regions of Europe, being considered within Objective 1 of the European Union (EU). For centuries, the baldios and montes veciñais en man común (MVMC) have played a key role in the economy of rural areas of Portugal and Galicia respectively. This function was lost throughout the 20th century due to forestry policies developed especially in the dictatorial regimes established in both Spain and Portugal, bringing about an important decline in agricultural practices. The restoration of democratic regimes returned ownership of the communal lands to the local/rural communities. Taking into account the extent and large average size of these lands, our aim was to describe the potential use and limitations of the communal lands, as well as the influence on sustainable rural development regarding the numerous ecosystem services it offers. An Analytic Hierarchy Process (AHP) was employed to evaluate stakeholders opinions in relation to communal land sustainable management. Both rural areas, i.e. Galicia and North Portugal, have similar characteristics, provide the same type of benefits and require numerous social improvements to achieve sustainable development. Communal lands and small-scale business initiatives can support local produce markets while promoting biodiversity conservation and ecosystem services.