This paper presents a historical review and overview of the Lao forest sector. Previous research and forestry related policy documents of Laos indicate that forest management has evolved through six stages. Initially, natural forests were used by local people for basic needs. Little was destroyed or degraded. The second stage was greatly influenced by French colonisation. The third was a period when natural forests made major contributions to national economic growth, when natural forests were increasingly and widely harvested. Remaining phases involved growing criticism of Lao forest management practices from international organisations and the Laos National Assembly. Recently, private investment in tree plantations has increased. Overall, ineffective policies and inefficient institutional agencies have seriously constrained Lao forest management. Policy instruments such as concessions to plantation development need to be modified and balanced by the promotion of outgrower schemes. Plantation investments should be encouraged to follow international standards, guidelines and codes of practice.