This article challenges conventional wisdom that in a situation of violent conflict, participatory development is not possible. It argues that the specific scope for participatory development is defined by the political economy of war and the political field in which development takes place.Therefore, one cannot assume a priori whether or not participation is feasible. This article reviews two case studies from Sri Lanka, where aid agencies have implemented a participatory development approach in the midst of ongoing violent conflict. The case studies illuminate the difficulties in implementing and the merits deriving from participation. Initiating participatory processes has the potential to undermine the basic logic of civil wars and political violence because it offers people, within a protected space, to rebuild their social networks, confidence and some positive view into the future. This article concludes that while aid agencies may find some opportunities to negotiate space for development, the leverage power upon the conflict dynamics will always be very limited.