The profitability of uncontrolled logging can be a significant obstacle to sustainable forest management, especially in the tropics. Rice et al. (1997) have argued that not only does traditional selective logging provide higher returns but also incurs less damage to forests than sustainable forest management systems that involve harvesting of many species and the creation of large gaps in the forest canopy to foster regeneration of light-demanding species. They claimed that protected areas were the only viable way to conserve forest ecosystems and proposed that loggers be allowed to log forests selectively once, after which the forests should become parks. Here we respond to the challenge posed by Rice et al. by exhaustively reviewing the evidence regarding the viability and desirability of sustainable forest management in the tropics. Following Rice et al., we use the term conventional timber harvesting to refer to existing practice, which typically pays little attention to maintaining long-term timber supply. Sustainable timber management implies taking steps to ensure forests continue to produce timber in the longer term, while maintaining the full complement of environmental services and non-timber products of the forest. Empirical studies tend to confirm the conclusion of Rice et al. (1997) that although sustainable timber management sometimes provides reasonable rates of return, conventional timber harvesting is generally more profitable. This implies that without additional incentives, one cannot expect companies to adopt sustainable management. The shortsightedness of many loggers, the slow rise in international timber prices, political uncertainty, and tenure insecurity simply reinforce this tendency. However, we reject the claim that sustainable timber management generally damages forests more than conventional logging. Rice et al. base their conclusion largely on the particular case of mahogany extraction in Bolivia, and even there it may not hold. In many cases, sustainable timber management performs better in terms of carbon storage and biodiversity conservation than conventional logging approaches, as well as producing more timber. If new carbon markets emerge, sustainable forest management might compete effectively with conventional timber harvesting. Timber certification systems may also provide a sufficient incentive for sustainable forest management in certain circumstances.