Ecosystem services provided by tropical forests are fundamental to rural livelihoods, yet increasing anthropogenic pressures threaten their sustainability. This study evaluated livelihood dependence on ecosystem services and willingness to participate in Payment for Ecosystem Services (PES) in the Oluwa Forest Reserve, southwestern Nigeria, using an integrated ecosystem service–livelihood–valuation framework. Primary data were collected from 450 households in eight forest-adjacent communities through structured questionnaires, complemented by key informant interviews and field observations. Descriptive statistics, the Livelihood Dependence Index (LDI), economic valuation techniques (market price, contingent valuation and benefit transfer methods), multiple regression and binary logistic regression were employed for data analysis. Provisioning services, particularly fuelwood, food crops, medicinal plants, timber and bushmeat, were the most utilized ecosystem services, while regulating services such as soil fertility maintenance, erosion control and climate regulation were also widely recognized. The mean LDI of 0.54 indicates moderate to high dependence on forest resources. Ecosystem services contributed an estimated annual value of ₦520,000 per household, with provisioning services accounting for the largest share. Age and household size significantly increased livelihood dependence, whereas education, non-forest income and distance from the forest reduced dependence. Education, income and awareness of ecosystem services significantly increased willingness to participate in PES schemes. The study concludes that sustainable management of the Oluwa Forest Reserve requires strengthened community-based forest management, livelihood diversification, environmental education and the implementation of equitable PES schemes to balance ecosystem conservation with rural livelihood improvement.