This sourcebook provides guidance to managers involved in the design of projects that follow the World Bank's forest strategy, and draws on past experiences to highlight innovative strategies for implementing them. The first section addresses a range of topics including how forests can be managed to enhance their contribution to poverty reduction; engage the private sector; meet the growing demand for forest products; and improve forest governance. For each topic, the document gives a general overview of fundamental issues, constraints, policies, and institutional requirements that need to be considered, and includes a discussion of past World Bank activities. It also outlines future priorities for scaling up activities, and lists of key sources of information. The second section introduces the World Bank's Forests Policy and provides guidance for implementing safeguards, including how to use environmental assessment to identify critical forests and natural habitats.