In this article, I utilize the perspectives of economic sociology to examine the structural background of forest devastation in Japan. First, I explore the factors behind cited problems for the forestry industry and demonstrate that expanded imports of inexpensively priced foreign-sourced logs do not sufficiently explain those issues. On that basis, I then demonstrate that the concepts and analytical tools offered by economic sociology are essential to a full understanding of relevant problems. Next, to understand how the current crisis differs from that experienced by forestry households in the 1980s, I turn my focus to changes in the social networks that supported the trade in wood products. The crisis witnessed a transformation that involved disembedding sawmills from the traditional wood trading networks that had relied on cooperative ties with forestry households. Eventually, social relationships between forestry households and sawmills were severed and these households became unable to address their economic difficulties through their existing practices. Given that context, I then examine the contrasting economic behavior of sawmills and forestry households and demonstrate that exposure to global price competition forced forestry households into uncontrolled over-cutting. Finally, I assert that economic sociology is better able to provide a more precise understanding of the true nature of the problems facing forestry in modern-day Japan than conventional economics with its adherence to the useful but insufficient principles of market competition and economic efficiency.