This study examines the feasibility of establishing a Wood Industry Cluster in Jangheunggun, Jeollanamdo. The purpose of this study is to explore the right direction of Island areas lagging behind, and to provide policies for the Korea Forest Service to promote the wood industry. According to the results, it is necessary that eight individual projects, including the Forest Products Marketing Center, should establish the Wood Industry Cluster. The estimated cost for the total investment rates to 970 billion Korean won (KRW). In addition, the major economic effects created by establishing Wood Industry Cluster were estimated as well. The results show that the Wood Industry Cluster would gain a production inducement effect equivalent of KRW 1.9 trillion, an employment inducement effect amounting to 9,000 jobs, a value-added inducement effect of KRW 830.9 billion, and an indirect tax inductive effect of KWR 78.6 billion. In order for the Wood Industry Cluster to succeed, the study suggests on building a network that will bring industry, academy, research institute and authorities together, which will also help form the Organizing Committee for the wood industry. In addition the study provides a policy alternative for developing the Wood Industrial Valley in Eokbul-Mt, a Forest therapy cluster in Jeongnamjin LOHAS Town and a BIO-Food Industry Cluster in Jangheung.