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Environmental threats and progressive degradation of natural resources are considered critical impediments to sustainable development. This paper reports on a participatory impact assessment of alternative soil and water conservation (SWC) scenarios in the Oum Zessar watershed, Tunisia. The first objective was to assess the impact of three SWC scenarios on key social, economic and environmental land use functions. The second objective was to test and evaluate the applicability of the 'Framework for Participatory Impact Assessment (FoPIA)' for assessing scenario impacts in the context of a developing country, in this case Tunisia. The assessed scenarios included: the originally planned SWC policy implementation at 85 % coverage of arable land of the watershed, the current implementation (70 %), and a hypothetical expansion of SWC measures to the entire watershed (100 %). Our results suggest that implementation of the SWC policy at 100 % coverage of arable land achieves the maximum socioeconomic benefit. However, if stakeholders' preferences regarding land use functions are taken into account, and considering the fact that the implementation of SWC measures also implies some negative changes to traditional landscapes and the natural system, SWC implementation at 85 % coverage of arable land might be preferable. The FoPIA approved to be a useful tool for conducting a holistic sustainability impact assessment of SWC scenarios and for studying the most intriguing sustainability problems while providing possible recommendations towards sustainable development. We conclude that participatory impact assessment contributes to an enhanced regional understanding of key linkages between policy effects and sustainable development, which provides the foundation for improved policy decision making.