Presently, the state forest (kawasan hutan) in Indonesia is vast, covering 70% of Indonesia’s land surface. This area has become the site of many problems, including issues concerning the overlapping of land rights, illegal logging and serious environmental degradation. This study looks into the origin of the state forest system during the colonial era, paying particular attention to the establishment of the forest service administration of the time. Faced with deforestation at the middle of the 19^th century, under the name of forest protection and conservation, the forest service administration was established, implementing bureaucratic administration based on waged labor. For the purpose of forest protection and conservation, the forest police and the forest judicial system were established in the 19^th century. The system was quite hostile to the local people, such that the slash and burn system was prohibited, leading to the punishment of local people who defied this prohibition. Increase of the forest offensive reflected the development of local economy. Since 1920, the attempt to strengthen the collaboration between inter-regional police forces failed, and the number of forest offences had increased until the end of the 1930s. One of the consequence of the strengthening forest police, local people carried out revenge against the police’s strict control by burning the forest. More fundamental problem was that making use of the forest such as cutting the tree, and assembling the fallen trees, branches and leaves were recognized as people’s customary right by people, on the other hand, the colonial Government denied the right, and confined their rights within the permit and police system.