Community Based Health Insurance (CBHI) was implemented in Rwanda to improve health care utilization for the poor population. Using data from health centers and CBHI schemes in pilot and control health districts, this study assesses the impact of the CBHI scheme on utilization of health services and on financial sustainability. CBHI significantly improved utilization of health services by increasing visits of members by four-fold, while the non members utilization remained unchanged over the same period. Results from multivariate regression models indicate that increase in CBHI enrollment was statistically associated with a reduction in visits. The majority of CBHI schemes were not able to cover their operating costs from the revenues collected from members.Government and donors should play an active role in supporting CBHI, especially at their early stage of development. Good risk management and community participation remain key elements for the success of CBHI in Rwanda. The author provides practical recommendations to health policy makers on how to improve the performance of CBHI and its scale up at the national level.