Charcoal production is a traditional and dynamic knowledge through which local communities are able to earn income. Traditional wood harvesting from forests for charcoal production has been performed in the Veshkellan village, an old rural area of Marivan, Kurdistan province of Iran located in northern Zagros forests. This activity has a great importance in the livelihoods of people in this area. This study is focused on two sections. In the first section, for the registration and review of the charcoal production process, field works were conducted in order to learn from physical activity during continuous time of recording. In the second section, the impacts of charcoal production on the forest structure and the forest production potential of charcoal production were assessed. For this purpose, an inventory network with dimensions 100×100 m was systematically randomly designed using GIS and, 30 circular sample plots (0.1 ha in an area) in two stands in harvested and non-harvested areas with similar physiographic conditions were established. In each sample plot, for all trees (collar diameter ≥ 5 cm) the name of the tree species was recorded, and collar diameter and diameter at breast height were measured. In each plot, for five trees (the trees with biggest diameter in plot), total height and crown diameter were measured. Results showed that in the study area, there are three kilns including: Barrel kilns, tanker kilns and earth kilns which are used with 27.5%, 40% and, 42% efficiency, respectively for the production of charcoal with different functions at a specified time and place. The process of charcoal production in each kiln consists of 16 stages. Based on statistical analysis, the target diameter in the charcoal production was 15 cm. The effects of charcoal production on the species composition and diameter distribution of trees were significant (P<0.05), however no significant difference was observed between the average forest stock in non-harvested stand (27.74 silve per hectare) and harvested stand (22.05 silve per hectare) (P=0.57), indicating that wood harvesting is based on local habitat capacity. The possible annual harvest was estimated 0.98 Silve per hectare. In order to fulfill the principles of forestry, it is better to pay attention to the traditional knowledge of local communities in preparing their plans and their participation at all stages of the plan (especially decision-making), because the local communities living in the forests have the highest impact on destroying or preserving these natural resources.