Shelterwood differs from the seed tree method by leaving more trees uncut. It can be thought of as a very heavy thinning, with the trees left uncut serving several purposes. One, they are sources of seed for the future generation of trees in the stand (just like seed tree). However, they also serve to "shelter" the forest floor and young trees from direct sunlight and wind.

Trees to be left in a shelterwood cut are selected not only for their ability to produce seed, but also for their potential value for harvest. Trees that, while they may be good seed producers, will not increase in size and value are cut, while trees that are both good seed producers and also have good growth potential are left behind to be cut during the next harvest. Keep in mind, however, that some trees will often be left that do not produce seed nor have growth potential.

These trees, often standing dead trees or mast producing trees, are essential for wildlife, an important consideration in any forest ecosystem. There are usually several cuttings. The first removes the "bad trees", creating openings for regeneration to take place and concentrating energy on healthy, dominant trees that also "shelter" the regeneration. Eventually, these dominant trees get in the way of the regeneration, at which point they are harvested to make room for the next generation.