Investigation was made on direction of utilizing Japanese forest within the development of local economy. Possibility of recycle economy society was discussed by studying the concept of local economy, which is presently being sought, and problems were confirmed through reviewing the attempts of its introduction so far made. Based on the results, barriers to implement utilization of Japanese forest were reviewed in order from the viewpoints of social system, policy and law, advantage for the citizens, and citizen's participation, and possible measures were proposed.