This study evaluated the system of revenue generation and its impact on volume of timber
exploitation in Osun State, Nigeria between 1991 and 2001 using functional models .Secondary data on
volume of timber exploited with corresponding revenue allocation, number of Contractors and revenue
generation were used. Data were analyzed using the regression procedures with models fitting to estimate
the best fit model, with volume of timber exploited as dependent variable while revenue generation,
number of Contractors and annual target represented the independent variables. The data was transformed
using logarithm transformation. There was a positive and strong relationship between volume of timber
exploited and the product of revenue generation and the number of contractors; with coefficient of
determination (R =0.9994) and the best model fit was found to be exponential model. The study indicated 2
that volume of timber exploited within the period of study increased with increasing number of timber
Contractors with burgeoning revenue generation into the State treasury. The effect of this was the alarming
nature of volume of timber exploited over the period of the study. It therefore recommended that
sustainable management guidelines be established in the state to avert the trend of Forest resources
extinction in the state and as well as setting up monitoring agency in implementing the guidelines.