A growing number of Payments for Environmental Services (PES) schemes are being implemented at the community level in developing countries, especially in the context of climate change mitigation efforts to Reduce Emissions from Deforestation and forest Degradation (REDD). In parallel, there is vigorous commentary about the implications of market-based or neoliberal conservation strategies, and their potential effects on communities that depend on natural resources. This article explores the political dimensions of community-level PES in Cambodia, where contracts for 'avoided deforestation' and 'biodiversity conservation' were implemented in five communities. The research examines three aspects of the community-level PES model that are inherently political: the engagement of communities as single homogeneous entities, capable of entering PES contracts; the simplification of land-use practices and resource rights; and the assumption that contracts are voluntary or reflect 'community choice'. These elements of PES work both discursively and practically to silence certain voices and claims, while privileging others. Therefore, the problematic nature of community-level PES is not that it is a market per se, but that it is a powerful intervention masquerading as a market. This process of 'market masquerades' emerges as a key element in the politics of neoliberal conservation in practice.