The question of whether and how an environmental state is emerging and/or evolving in the developing world deserves greater scholarly attention. This paper makes a contribution to the issue by exploring the scope and limitations of state action in the battle against environmental deterioration in three developing countries: Argentina, Bolivia and Paraguay. More concretely, the paper examines the capacity of these states to design and implement policies and enforce laws aimed at controlling deforestation in the region of the Gran Chaco Americano, the second biggest ecosystem of South America that is currently affected by large-scale deforestation. As Argentina, Bolivia and Paraguay differ in their political structure (federal, unitary and unitary-decentralized), the empirical analysis adopts a multilevel approach that allows examining state involvement in forest protection across multiple levels of social organization. The within- and cross-country analyses provide valuable insights into the social and institutional conditions influencing the capacity of developing states to protect the environment at different levels of government. The paper also contributes to filling the gap of knowledge about the challenges to state environmental governing in settings evidencing cross level institutional interactions.