Lions need large areas to thrive, and managing this land is expensive, researchers said.
The study by researchers at University of Kent in the UK shows land under long-term management for trophy hunting can help fill this shortfall.
The team noted hunting works but only when hunting companies are given long-term land management rights.
Henry Brink and Bob Smith from the Durrell Institute of Conservation and Ecology (DICE) at Kent, and Professor Nigel Leader-Williams from the University of Cambridge, studied lion population trends in Tanzania's Selous Game Reserve.
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In contrast, lion trophy hunting levels were sustainable in blocks owned by the same company for 10 years or more, thereby also maintaining important habitat for this threatened species.
Brink said the research shows that those who have secured long-term use rights to natural resources are more likely to manage them sustainably.
This is an important lesson for lion conservation, as loss of habitat means this species is increasingly restricted to protected areas, researchers said.