In order to assess the potential of increased mechanization of harvesting functions in Nepal, surveys and field of present system were made to provide a basis for evaluation. From this information the cost of production of manual harvesting functions were compared to the cost of mechanized functions. The analyses of cost for mechanized functions were made using a mathematical model to predict the cost of production per cubic feet. The analysis predicted that: Cost of production in felling, bucking, and limbing by chainsaw is made economical than the manual operation by axe and cross-cut saw. Skidding of logs by a rubber tired cable skidder (JD 440 C) is costly. However, its potential can be considered for the hill region because a manual skidding is difficult there. A farm tractor could be economical for a skidding distance of 200-300 feet in the terai. The cost of loading and unloading of logs with a hydraulic knuckle boom truck mounted loader (Prentice 110) is economical. Implementation of mechanized harvesting will be feasible only, if arrangements are made to train operators, provide supplies and service for machine, provide for unemployment, improve machine utilization, and generate the capital needed for equipment purchases. / M.S.