Quite often Norway spruce (Picea abies (L.) Karsten) forms an understorey in birch dominated stands in Finland. Advantageous growth conditions for both storeys are present especially in downy birch (Betula pubescens Ehrh.) stands on drained fertile peatland. The most common way of regenerating mature Downy birch forest is clear cutting and replanting with Norway spruce, even if vital spruce seedlings or saplings was already growing under the birch. The aim of this study is to investigate the impact of retaining young understorey spruces on the productivity of harvesting and on the quality of the remaining stands in downy birch dominated stands with modern cut-to-length (CTL) machinery. Retaining undergrowth spruces decreased productivity of cutting in managed stands (600 stems/ha) by 6–9 per cent and in unmanaged stands (1200 stems/ha) by 11–17 per cent compared with clear cutting, where the understorey is not considered. Compared with the case where no understorey was present, the decrease in productivity was 10–17 per cent and 21–30 per cent respectively. In forwarding, retaining the undergrowth decreased the productivity of loading phases by 7–14 per cent. Harvesting treatment where spruces were retained produced an adequate stand structure for the future growing stock. Using this method, 14–24 per cent of the original spruces were totally destroyed while 25–44 per cent of spruces were destroyed when they were not considered for harvesting. The spatial variation of the remaining spruces was much better in the treatment where spruces were retained. Our study results shows that in this kind of two storey birch–spruce forests, the harvesting treatment where spruces are retained while cutting is the most acceptable and profitable method. It allows for a vital spruce sapling to continue growing, and avoids regeneration and tending costs or other harmful effects of clear-cut areas such as the freezing of young spruce plants and an increase in the ground water table.