Deforestation is one of the incredible difficulties confronting mankind. The extraction of woods remains one of the main drivers of deforestation in Malaysia. Relatively, rising in timber values may lead to enlarge in the net advantages of clearing land. Thus, this study is written to assess the process and underlying causes of forest cover change in Malaysia from 1997 to 2016. After assessed the discusses it on the impact of direct drivers with different management scenarios on deforestation in Malaysia. The research design, data, and method also performed by using System Simulation Model. Model validation and sensitivity tests was carried out after the simulation model is implemented to check the correctness in line with the real system. The simulation analysis was carried out with three different simulation periods together with the impact of two main policies: (1) controlling threshold profit; (2) discounted rate. The result of the study indicates that the most suitable policy combination to manage the deforestation is scenario 2 (policy 2B) with the RM650 per/ha threshold profit coupled with interest rate r=4% within 50years period.