Conventional forest governance often overlooks the influence of informal institutions. This study demonstrates how the M’bona, an indigenous spiritual system in Malawi, operates as a resilient, polycentric governance system for managing forest resources. We employed an exploratory sequential mixed-methods approach in Nsanje District by synthesizing nine relevant studies, conducting 24 focus group discussions (FGDs), 18 Key informant interviews, 5 expert interviews, and 229 household interviews. We then analyzed qualitative data from secondary sources and FGD using content analysis, while descriptive and inferential statistics were used to analyze data from the interviews. We found that M’bona’s council enforces a compliance rate of 72%, with formal rules significantly limiting timber extraction (β = -0.53). However, the authority of this system is declining, and its governance is gendered, as women and youth groups primarily drive the collection of Non–Timber Forest Products. We argue that M’bona represents a crucial and resilient governance structure, illustrating how hybrid institutional arrangements can effectively regulate the use of forest resources. These insights challenge traditional forest policy by advocating for the context-specific integration of informal institutions, prompting policymakers to incorporate, rather than replace, such endogenous systems. Our findings support the theory of institutional “jellying,” which posits that formal and informal rules can coexist in a dynamic manner. This concept provides a framework for adaptive forest management in Malawi and beyond. For a sustainable future, we advocate for forest governance models that integrate traditional knowledge with adaptive strategies. Future research should therefore focus on institutional adaptation in the context of climate change and the exploration of experimental governance models to enhance sustainability transformation in forest resource use practices.