The purpose of the stewardship contracting authority is to allow public land managers to achieve land management goals while meeting local rural community needs. The authority's use is on the rise, and many regard stewardship contracting as a win–win mechanism for federal land management and a means of ending the “timber wars” on public land. This report provides an overview of stewardship contracting, with a focus on improvements needed for it to reach its full potential. A case study of the economic impacts of a high-profile pilot project of the new authority, the Clearwater Stewardship Project, is used to illustrate its potential. With impact assessment software (IMPLAN), I find that the project's total economic impact includes a $23 million increase in final sales for 206 industry sectors in eight Montana counties, 148 full- and part-time jobs, $4.6 million increase in wages (2003 dollars), $1.4 million increase in proprietors' income, and $570,000 in indirect business taxes. Over 85 percent of the impacts arise from the harvesting and processing of wood, while 10 percent arise from restoration activities paid for with the receipts from these harvests. The combination of harvesting, wood processing, restoration, administrative, and monitoring activities typical of a stewardship contract serves to spread impacts across a wider variety of economic sectors than timber harvesting alone.