This study was an attempt to analyze the socio-economic factors affecting forest area in Pakistan. Every year different areas are afforested and regenerated. Policies and programs are prepared to increase the forest area up to national requirements but there is no significant increase in the area rather fast deforestation is taking place. Forest communities play a significant role in the use and depletion of these resources. The study highlighted the assumptions about some macro economic variables, which are generally considered as key socio-economic factors that cause deforestation and depletion of forests and tested the hypothesis in order to show the impact of these factors on forest area in Pakistan. In order to achieve the objectives of the study and to test the hypotheses the followed methodology has two aspects; one, consulting the forest communities in forest rich areas of the province and second, analyzing the macro economic data of different socio economic factors that have impacts on the forest area of the country. For the first aspect two forest rich areas in NWFP; District Abbottabad and District Mansehra have been selected. The socio economic conditions of these areas have been discussed and analyzed. The priorities and practices of forest communities in the use of different resources have been checked. For the second aspect the study analyzed time series data of some of the socio-economic factors of Pakistan for example agriculture production, cultivated area, livestock and human population, the consumption of fuel wood substitutes etc. Taking the forest area of NWFP and forest area of Pakistan as a whole then checked the results of these socio- economic factors. For the analysis multiple regression technique was applied on the time series data from 1972-2000. The results of the econometric models were then compared with the primary information collected from the two districts of NWFP; District Abbottabad and District Mansehra. These results were further analyzed by comparing them with earlier studies conducted in the same field. iiThe results of the primary data showed that most of the firewood and timber is extracted illegally and there is no official record or even a rough estimation of the total quantity illegally extracted. The most responsible figure as mentioned by the locals also includes Forest Department, which is a part of timber mafia. Forest department has no arrangement for forest fires; it is the locals who extinguish it by using local practices. The study area has not received real benefit of gas provision by the government in the country because these facilities are not yet extended to their areas and alternate sources are not enough. Both the study areas are suffering from some problems, which are contributing to deforestation, for example common property, lack of interest and cooperation of Forest Department with locals, lack of follow up of forestry programs especially started by foreign agencies etc. In both the areas there is no increase in animals so livestock population is not the prime threat. Human population has increased but they are either migrating to other areas or opting for service sector. In both the areas people have very little knowledge about government policies and programs. The results of the primary information showed some valuable facts about forest land conversion for other purposes, about Forest Department, the role of government and non-government organizations, about forest fires and about timber mafia in the study area. The results of the regression models obtained from the time series macro economic data showed that some of the socio-economic factors of the country that are generally considered as the most responsible factors for the depletion of forests such as increase in human and livestock population are not the important factors contributing towards deforestation in Pakistan but some others like cultivation, construction, consumption of timber and agriculture production are playing their due role towards deforestation. The study further showed that increase in the consumption of firewood substitutes could not significantly improve the situation. The analysis further showed the extent of effect of different variables on the forest areas. The recommendations of the study have given more emphasis to control the land use practices especially controlling land conversion for other purposes, proper demarcation of iiiforest boundaries in Abbottabad and Mansehra districts to save from conversion and misuse, on regular basis the involvement of locals in plantation and giving incentives in cash and kind for plantation, provision of alternate energy resources in the study area especially to hill side forest communities, and proper follow up of the programs already launched in forestry sector to maintain the confidence of the locals. Further, since cultivation and construction activities are the main threat found in the study so more focused attention is needed in this regard and the general policy for addressing these problems would not work. To build up forestry data base is the prime requirement. The macro economic time series data of Pakistan is not accommodating illegal timber. So constructing an estimated time series data for actual fire wood and timber consumption including illegal extraction in Pakistan would be the future task based on the results of the present study that would give more robust results out of the present research.