ABSTRACT Effective forest management is based on the multipurpose use of existing forest resources and its ecological functions. The principle of multifunctionality is focused on sustainable forest management, taking into account environmental, economic, and social factors. The purpose of the research is to analyze development patterns of multifunctional forest management in order to identify the priorities in the forest sector development. The paper defines indicators affecting the level of forestry activities and designates territory zones depending on their qualitative and quantitative characteristics. The analysis of forest use for wood production showed that the annual underutilization of the allowable cut is due to a decrease in the total volume of timber cutting, depressed demand for hardwood of a low commercial quality, insufficient transport development of forests, and the lack of enterprises engaged in advanced processing of semi-subsistence deciduous forest stand. During the studies, it was found that areas, which location is economically advantageous, are more suitable for recreation purposes, as they are better provided with natural resources and are closer to waterbodies (rivers, lakes, reservoirs), possess unique forestland and are more attractive for investments. The paper identifies the problems and promising areas of multifunctional forest management.