Reform in the forest sector in Peru resulted in a new forestry law, developed with substantial input from international conservation and donor organizations. While it incorporates the principles of sustainable forest management, biodiversity conservation and livelihood improvement, inconsistencies remain between the regulatory mechanisms and actual practices and outcomes in the field, leading some to consider the legal framework a failure. This article suggests that problems in the sector persist because the legal and regulatory frameworks do not incorporate existing local institutions, norms and practices - all of which are rooted in complex historical social, political and economic relationships. Based on information from interviews, data on movement of timber and analysis of secondary information, the authors examine the local structure, actors and dynamics of the concession forestry system in the Peruvian Amazon. The article focuses on how financial, social and political relationships in the network of actors, and particularly the patronage system, have helped actors in the sector adapt to the new policy framework. It is proposed that any further reform in the forest sector must be based on a keen understanding and appreciation of the praxis of timber extraction in the region.