Biotechnology is one of the most controversial and intensely debated subjects of our age. The subject of genetic modification (GM) has been a politically contentious subject with respect to agriculture, and it seems likely that the issue of GM trees will, at some stage, become a live political issue. Given this, forest research institutes should be able to demonstrate that this subject has been seriously considered, and that policy in this are can be justified and supported. The subject of GM trees is a relatively new one in world forestry, although some policy trends have already become apparent. First, most major international environmental NGOs, stressing the scientific uncertainties involved with GM trees, have tended to oppose GM trees, or at a minimum to urge extreme caution in their use. Second, most major intergovernmental organisations have aboided taking a policy position on the GM issue. This is not due to indifference, however, but to differences on the subject between member states. For example, the World Bank has not issued a policy statement on GM due to the different views of its shareholders in Europe and North America. Third, most international forestry organisations and networks, including the International Union of Forest Research Organisations (IUFRO) and the Center for International Forestry Research (CIFOR), have yet to formulate a clear policy position on the use of GM trees. This reflects the differing approaches to the issue within the international forestry community. This paper presents a set of possible policy options on the subjects. It provides some analysis of the possible benefits and potential disadvantages of GM trees with respect to five clusters of argument: scientific and environmental, legal, economic, social and ethical. No clear, unambiguous arguments emerge either for or against GM trees. On the one hand there are potential environmental and economic benefits. For example, the enhanced productivity and/or improved quality (e.g. for pulping) that genetic modification may provide could reduce the pressures on natural forests. GM trees can be made more resistant to certain pests. But on the other hand there are potential risks to the environment from genetic contamination of natural stands, the economic costs of which could be significant. The social costs of GM plantations could be severe, especially in developing countries. The legal situation is also unclear: while the Cartagena Protocol on Biosafety provides some guidance, it is open to differing interpretations. The paper provides eight policy options for the consideration of forest research organisations such as the EFI, ranging from full and active support for GM trees to complete opposition. The policy that is chosen will depend on how the various risks and benefits are assessed, how the current body of international law is interpreted, and which ethical arguments are considered most persuasive. Should an organisation choose to support research into GM trees it is suggested that it should also adopt a contingency plan for diengaging from this area should evidence emerge that the risks are unacceptable or that GM trees are causing serious and irreversible damage to nature.