In an innovative effort, the USDA Forest Service is planning to reduce the long-term threat of catastrophic wildfires by inaugurating a series of forest thinnings for bioenergy. The start-up project is in the Nutrioso area of the Alpine Ranger District, Apache-Sitgreaves National Forest. "The Nutrioso Wildland/Urban Interface Fuels Reduction Project", under the authority of the Healthy Forest Restoration Act of 2003, addresses the existing condition of the forest, defines the desired condition of the forest, and proposes actions that will result in a healthier forest and a reduced risk from wildfire. This project is part of larger-scale, small-diameter tree thinning covering an area of 607 km(2) over a 10-yr period. Although the Nutrioso Project encompasses 213 km(2) of mixed ownerships, only National Forest lands (79%) will be treated. A variety of thinning and fire prescriptions have been established depending on slopes, road access, and distance from private land. The mostly small-diameter (< 12 cm) trees in ponderosa pine and mixed conifer stands are being removed under a "Stewardship Contract" for utilization in small power plants (< 3 MW), and a wood-heating pellet manufacturing facility. The outlet for the wood fuel pellets is the growing market for house and business heating, and co-generation fuel in a 615 MW coal-fired power station. This paper examines the scope, costs, and environmental trade-offs of this pioneering and remarkably successful effort in forest bioenergy in the southwestern USA. Published by Elsevier Ltd.