The increasing Canadian beaver (Castor canadensis) population has caused forest damage in Finland. However, the occurrence, extent and importance of the damage have not been comprehensively studied. The field inspection was carried out in all of the beaver damage areas (n = 50) in the Anttola, Juva and Pieksämäki game management units in summer 1998. The characteristics of the damage areas, types of damage and the severity of the damage were examined. The size of the damage areas averaged 2.2 ha. The damage areas occurred on peatland forest more (p < 0.05) than expected. The dominant tree species were commercially valuable trees such as Scots pine (Pinus sylvestris) (33%), Norway spruce (Picea abies) (18%) and birches (Betula spp.) (47%). Birch occurred as dominant tree species more (p < 0.05) than expected. The proportion of older forest development classes was considerable. The most important type of damage was flooding (50%) caused by the damming activity of beavers. The trees were dead or dying in 18% of the damage areas. It was estimated that the ecosystem engineering performed by beavers was of no importance in 28% of the damage areas. Prevention of beaver damage has been carried out in 80% of the damage areas. In the study area, beaver numbers have steadily increased, although the number of beavers taken by hunting and the allowed hunting harvest have sharply increased. It is suggested that the methods used to prevent beaver damage should be improved and a compensation system should be provided by the state for the most damaged areas. Beavers can cause damage to commercial forestry, and this should be taken into account more effectively in the management plans made by the game management districts.