Sandalwood is one of the world’s most valuable forest products. However, much of the wild-sourced sandalwood has been overharvested. The Vanuatu Government has been implementing measures to foster the sustainable use of sandalwood, including controlling the quantity that can be harvested, requiring value-added processing, and producing sandalwood seedlings for planting by landowners. This report looks at the current rate and location of new plantings in Vanuatu, the silvicultural requirements for growing sandalwood, and the likely economic returns expected for smallholders and other investors from growing sandalwood. Marketing and policy considerations are also identified to optimise the value and sustainability of the Vanuatu sandalwood industry.