Timber harvesting operations in Tanzania are changing from semi-mechanized and labour intensive methods to fully mechanized operations. To be cost effective, such operations must be carefully plannedand controlled. This requires detailed information on every aspect of timber harvesting machines. This study was therefore designed to analyze the productivity and costs of using feller bunchers for timber harvesting at Sao Hill Forest Plantations. Productivity studies were performed during clear felling operations. Continuous time study technique using snap-back timing method was used for data collection on productive and delay times. Supplementary cost data was obtained from records at the logging department of Mufindi Paper Mill Company. Data were analyzed using Microsoft Excel spreadsheet to determine productivity and costs as a function of stand variables and terrain factors. Results showed that, the feller buncher production rates ranged from 16.5m3/h to 80 m3/h when the tree sizes (Dbh) varied from 11cm to 32cm respectively. Further results showed that productivity and costs were highly affected by the moving distances of the feller buncher from a tree to tree. Overall, the distance and the tree size had significant influence on the productivity and costs thefeller buncher. The unit felling cost for feller buncher averaged 2,075 TZS/ m3. The study concludes that, the higher initial capital investment of feller buncher felling could be paid off by higher hourly production. Key words: Timber harvesting, labour, semimechanization, Tanzania