Productivity growth is an important component of long term economic growth. It has been estimated that historically, productivity increases have accounted for as much as a third of the growth rate in the United States. During the period 1950 to 1973, the U.S. economy grew at an average annual rate of 2.1 percent, dropping to an average annual rate of 0.3 percent for the period 1973 to 1977. Current sluggish growth rates for the economy have been blamed almost entirely on the recent slowdown in the productivity growth rate. For the same periods, aggregate productivity growth rates were 2.1 percent and 0.4 percent, respectively. This study explores the sources of productivity change in the U.S. forest products sector. Specifically the following questions were considered: (1) Since the forest-based sector is diverse in terms of products and manufacturing processes, are there differences in the sources of productivity change between the industries comprising the forest-based sector? (2) and, considering the regional nature of some forest products industries and the regional differences in the wood resource, do the source of productivity change vary across geographical regions as well? The objectives of the study are as follows: (1) analyze the potential sources of productivity change, (2) identify the important factors involved in productivity change in the forest-based sector, (3) and, assess the relative importance of these factors among industry groups and geographical regions.