The relevance of the topic is justified by the diversity of unique natural ecosystem objects in the territories of Kosovo and North Macedonia, where forestry activities are traditional. The aim of the study is to analyse the current state of ecosystem services provided by forests in Kosovo and North Macedonia in the context of their assessment and development prospects. Several general scientific empirical and theoretical research methods were employed, including comparison, generalization, analysis, synthesis, and abstract-logical methods. The article characterizes the current state of forest resource utilization in Kosovo and North Macedonia, highlighting key issues in the management of forest lands, including those hindering the development of ecosystem services. The study justifies indicators of the level of forest resource utilization in Kosovo and North Macedonia, examining the percentage ratio of forest cover indicators in the Western Balkan countries. The relationship between land areas of different categories and purposes in Kosovo is analysed, along with the designation of protected areas within forested areas in North Macedonia. The necessity of conducting an economic assessment of specific ecosystem services provided by forests is justified. Six methods used in the economic valuation of natural goods resulting from forest resource utilization are detailed, deemed most suitable for the Western Balkan countries. A comprehensive list of the most relevant functions of forests requiring economic assessment is compiled. Throughout the justification of all stages of the work, specific ecosystem services provided by forests that may gain greater importance in the future are identified. The practical significance of the study lies in forming the fundamental methodological aspects that can be utilized in the assessment of ecosystem services provided by forests