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The government of the Lao People’s Democratic Republic has made great efforts to halt the rapid decline in forest cover by implementing different policy measures, which include measures: to address the causes of the decline in forest cover; to sustainably manage natural forests; and to regenerate degraded forests. In the last decade, forest cover has continued to decrease at a lower rate of just 1% from 2002 (41.5%) to 2010 (40.3%) at national level; however, there has been a net gain of forests in the northern region. This article attempts to examine what policy measures have an influence on the increase in forest cover in this region. This study reviews progress reports and official documents on policy measures addressing major causes of deforestation and forest degradation, rehabilitating degraded forests, and managing natural forests. The results from this study indicate that the natural regeneration of degraded forest provides a significant contribution in the increase of forest cover in the northern region. This increase is most likely influenced by the decrease in both rural poverty and slash-and-burn shifting cultivation in the northern provinces. Timber harvesting and conversion of forest to other uses still remain critical issues in Laos because of incomplete national land use zoning and a lack of forest management plans in most of the natural forests, as well as weaknesses in law enforcement. Further research to identify the drivers behind the increase in forest coverage in the northern provinces will provide vital information to develop clearer policy instruments to rehabilitate degraded forest at national level.