This paper addresses the potential impact of the introduction and development of biotechnology on planted forests. It includes a description of some recent innovations in forestry including the use of traditional breeding, and also more recent innovations involving biotechnology, including the development of clonal propagation and the use of modern molecular biology techniques. In addition to describing these innovations, the paper undertakes an assessment of their probable impact on future production of the forest industry, on the global timber supply, and on future markets for timber and wood products. The paper offers a description of recent innovations in tree breeding and biotechnology, including a discussion of innovations in agriculture that have promise for forestry. This is followed by a discussion of the current role of biotechnology in forestry and an assessment of the various types of biotechnological innovations that could be forthcoming in the next decade and beyond. Additionally, the paper examines the likely effects of biotechnology on the economics of forestry. An estimate is provided for the potential cost savings and/or value increases expected from the various innovations. Using these estimates, a quantitative assessment is made of global potential economic returns to the most immediate and major innovation, the herbicide tolerant trait. Additionally, estimates are made of the potential impact of cost savings realized from this type of biotechnology on future timber supplies in the global timber market.