The purpose of this study is to find out why forest management through the development policy of the Forest Management Unit (FMU) in Indonesia is needed and what are challenges of developing a Forest Management Unit in Indonesia. This study is normative legal research with primary and secondary legal materials. The results showed that the development policy of the Forest Management Unit (FMU) is needed for the benefit of the community in optimizing the management and utilization of potential funding for climate management of the regional forestry sector either at the provincial, district/city level or management unit level as well. While challenges in developing Forest Management Unit (FMU) in Indonesia including limited human resources (HR), not enough support by local governments, disharmony relationships, social conflicts, and economic interests.