The paper presents the economic values of selected forest goods and services in Ayer Hitam Forest Reserve (AHFR), Puchong, Selangor. It provides arguments for forest conservation and management on a sustainable basis. AHFR is currently used for research and education fly UPM staff and students. Other important direct uses include the local dependence of Orang Asli for their livelihood, recreation fly the local community, environmental education programme and other indirect uses such as protection of water resource and carbon sequestration. Appropriate methods were used to estimate the economic values of selected forest goods and services in AllER The total estimated economic value of five selected forest goods and services (timber, medicinal plants, Orang Asli dependence on forest, potential recreation benefit, and conservation value) was RM2.43 billion for the whole 1248 ha or RM1.94 million per hectare. This value is substantial and may be greater than the cost of conversion forest to other alternative uses such as housing development or agriculture. This study is important for policy-makers such that the forest can be maintained based on current uses and not to convert to other uses. The conversion to other uses may involve high social cost.