Forests are considered crucial assets for sustainable rural development, and contemporary forestry is an industry where production, environmental and social goals can-and should-be handled simultaneously. Swedish family forest owners (FFOs) are expected to both manage and conserve their forests for the benefit of the whole country, but there are contradictions between development and conservation and between traditional and alternative forms of utilization representing dilemmas in rural areas. Tensions between urban and rural areas, between demands on what to produce and protect, are often linked to the FFOs' views on opportunities for forest management. The aim of this study is to identify and analyse the extent to which FFOs perceive that social values have the ability to generate "new" goods and services as a supplement or alternative to traditional forestry, and to suggest how the forests might be managed to render high social values. Fiftyseven interviews were conducted with FFOs (both resident and non-resident). The results indicate that regardless of where they reside, FFOs have a multifunctional view of their forests and forest management, that the social values attached to forests can play an important role in development of local recreation-and forestbased tourism activities, and in this respect they can enhance sustainable rural Electronic supplementary material The online version of this article (https://doi.org/10.1007/s11842-017-9379-9) contains supplementary material, which is available to authorized users. development. It is, however, not obvious who might start and develop these businesses, since there seems to be a lack of interest among the FFOs themselves.