The Malaysian timber industry has made tremendous progresstowards making this sector one of the country's importantforeign exchange earners. From a major exporter of tropicallogs, it shifted to become a reliable exporter of highquality sawn timber during the 1980s. Realizing the needto maintain long availability of its raw material supplyand with the intention of achieving higher value from itstimber resource, Malaysia has decided the direction andfuture of its timber sector. The first Industrial MasterPlan (IMP) was launched in 1985 with the objective of makingMalaysia a highly visible and reputable center for furniture,joinery, and molding. Therefore, this study is intended toassess factors leading towards promoting the use of timberin downstream processing furniture manufacturing.This study had four objectives. Firstly, to identify anddescribe factors that affect the export performance offurniture. Secondly, this study described trade policies,incentives, and government efforts that supported thedevelopment of the furniture industry in Malaysia.Thirdly, a regression model was used to quantify therelationships among these factors in order to predict theexport of wooden furniture from Malaysia. Lastly, thisstudy suggests measures that could be taken to enhance theposition of the Malaysian furniture industry in the globalmarket.In understanding the position of Malaysia's furniture market,this study began with a review of international furnituretrade and policy development. Two of the world's majormarkets for furniture, the United States and Japan, wereexamined to understand their furniture industries,requirements, and market trends. In addition, briefprofiles were presented of furniture and related industriesand markets of three significant furniture suppliers fromAsia: Taiwan, Indonesia, and Thailand.The structure of Malaysia's furniture industry was examinedand reviewed, in order to have a better understanding of itssize and export potential. The Malaysian furniture industryis comprised of small units of factories, particularly thefactories located in the furniture villages and accountingfor 70% of the numbers. Seventy five percent of thesemedium and large factories are locally owned and theremaining are either joint ventures or foreign owned. Tohelp expedite the objective as specified under the IMP,the Malaysian government and its agencies have formulatedseveral measures, with the purpose to provide an industrialand business environment conducive to the industry.In this study, important factors which influenced thedevelopment of this sector were examined. The supply ofraw materials has been an important factor that couldaffect the establishment of the processing industry and itscompetitiveness. In addition to this, the current issue ofMalaysian Ringgit depreciation has been taken into account.The Malaysian exchange rate to the U.S. Dollar was linked tothe United States import price indexes to see their impacton the export performance of Malaysian furniture. Thesupply and price variables were found significant andelastic to the export of furniture from Malaysia. Theexport predictions were made for three-year periods. Dueto the financial crisis that hit Asia last July, there aremany uncertainties on these independent variables thatcould affect the accuracy of the export predictions.Nevertheless, the model developed should be useful andreliable once revised projections of these variables aremade available.