Wood for firewood, fence posts and construction material and forage for domestic livestock are key resources in the caatinga vegetation zone of northeastern Brazil. This experiment was designed as a preliminary assessment of thinned caatinga as the basis of a production system which optimizes forage and wood production. Two levels of thinning (25% and 55% tree canopy cover) were compared to cleared (0% tree canopy cover) and undisturbed (95% tree canopy cover) caatinga in terms of forage and wood production and goat nutrition. Clearing and thinning of caatinga vegetation resulted in higher amounts of available forage through the wet ·season and up to the time of leaf fall. After leaf fall, total available forage was similar for all four treatments. Dietary selection differed among the treatments only in February and May, when goats on treated pastures selected higher amounts of herbaceous vegetation than those on control pastures. Herbaceous vegetation was the primary dietary constituent on treated pastures throughout the wet season. During mid to late dry season, when herbaceous vegetation was dead and leaf:stem ratios were low, browse was consistently selected at high levels. Nutrient content of diets were not different among treatments, but forage and digestible energy intakes were higher (P<.OS) on treated pastures than on control. Due to lack of wood production on cleared plots from an intact tree component, total aboveground biomass production for the cleared treatment was 30% less than that for the control and about 25% less than that for the two thinned treatments. Overall, cleared and thinned treatments had similar positive forage and animal responses but thinned treatments had the added benefit of an intact tree canopy producing valuable wood. The dry season has been identified as the most critical time of the year for livestock due to low forage availability and quality resulting in weight losses and mortality. Results of this study indicated that either supplementation or increased availability of nutritious forage would be necessary for goats to continue to grow beyond the first half of the dry season. Thinning may be a means of increasing the availability of nutritious forage.