Social capital has been widely advocated as a way of understanding and building community participation in the interest of health improvement. However, the concept as proposed by Putnam, has been criticised for presenting an overly romanticised account of complex community relations. This paper presents analysis from a qualitative evaluation of a Healthy Living Centre (HLC) in the North of England, to examine the utility of the concept of social capital in this context. We found the concepts of ‘bridging’ and ‘bonding’ social capital were useful – though not without limitations – in helping to make sense of the complexities and contradictions in participants’ experiences of community group participation. 'Bridging' helped provide an understanding of how the decline in shared social spaces such as local shops impacts on social relationships. 'Bonding' highlighted how community group membership can have positive and negative implications for individuals and the wider community. It was found that skilled group leadership was key to strengthening bridging capital. Politically, in the UK, community participation is seen as having an essential role in social change, for example, its centrality to the coalition government's idea of the ‘Big Society’. A micro‐examination of this HLC using the lens of social capital provides a valuable critical insight into community participation. It shows that this kind of initiative can be successful in building social capital, given conditions such as an appropriate setting and effective leadership. However, they cannot substitute for other kinds of investment in the physical infrastructure of a community. Copyright © 2012 John Wiley & Sons, Ltd.