Participatory approaches are assumed to have a positive influence on decision-making for natural resource management. However, there are only a few detailed studies that examine their impact on participants. This paper analyses the contribution of a participatory modelling and simulation approach to the development of learning and relational capacity. It analyses two experiments that deal with pollution and sanitation issues in the expanding peri-urban settlements of São Paulo. The impact of the approach was assessed through interviews immediately after the simulation and 8 months later. The assessment identified the existence of social learning and the acquisition of skills related to integrative negotiation of complex environmental issues. Despite substantive and relational/normative learning, the acquisition of knowledge and negotiation skills, and a more integrative perspective, participants were unable to apply their new negotiation skills for a sustainable length of time within the prevalent socio-political and institutional context. A long-term iterative approach, involving relevant stakeholders in the process and process assessments, is needed to establish more conducive institutional structures.