Tropical forests are highly diverse and provide a great deal of economic value. They play an important role in providing goods and services which contribute to long-term social benefits in local communities. This study was carried out to examine the tree composition and estimate its economic value of timber resources in a lowland coastal forest. Four one ha plots were established in Pasir Tengkorak Forest Reserve in Langkawi, Kedah and the subplots measuring 10 × 10 m were established in each plot. All trees greater than 1 cm DBH (diameter at breast height) were identified and the parameters measured included tree height and diameter. The species diversity indices obtained for all four plots were relatively high. The Simpson’s index of diversity ranges from 0.946 to 0.969, while the Shannon-Weiner index (H’) ranges from 3.808 to 5.616. The Simpson’s measure of evenness (1/D) ranges from 0.239 to 0.563 suggesting that species evenness in the four ha plots were low. Stumpage value of timber in the study area was quite high with average value of RM33,600.46 per ha. Regression analysis showed that the relationship between stumpage value and species diversity was significant at the 5% level.