Methods to monitor the sustainability of forest management oil local to regional scales are currently being developed in Europe, based on pan-European criteria. However, current approaches to indicator development have several shortcomings. First, they fail to integrate the links among indicators. Second, they do not address the factors giving rise to specific indicator values explicitly. Third, they select indicators with an emphasis on data availability or case of measurement rather than oil informational content. To overcome these problems, we propose using a modelling approach to indicator development. What modelling and indicator development have in common is that they both try to capture the essence of real, complex systems. In this paper. we present an initial attempt to develop indicators for the sustainable management of mountain forests, using a modelling approach. Key issues that make the Sustainable management of mountain forests a challenge, Such as the poor ability of many stands to fulfil current human needs, are identified. A conceptual model depicting the most relevant system elements and links is described. In contrast to the Pan-European criteria and concept areas of sustainable forest management, which are result-oriented, the elements in the conceptual model are process-oriented. The approach could lead to a better understanding of the factors influencing the decision-making at the management unit level and to the identification of a set of meaningful indicators. To evaluate its full potential, however, a simulation model should be developed based oil the conceptual model, and be applied to case studies.