Sandalwood (Santalum album L.) is an endemic species of ENT - Indonesia, currently listed as a vulnerable species on the IUCN Red List. The study seeks to understand the status of sandalwood among agroforestry farmers, on how the ecosystem balance of the sandalwood trade has been maintained for centuries under traditional management, and how current institutional arrangements or policies seem to be leading to unsustainable sandalwood production and trade. Primary data were collected through a survey of eight villages in the South Central Timor district, West Timor, purposively selected based on the distribution of the sandalwood ecosystem; secondary data and information were obtained from manuscripts and open-access sources. The research showed that the current sandalwood trees are mostly found in Mamar, a traditional agroforestry system, with dominant respondents (32%) maintaining populations of fewer than 15 trees, and only 2% respondents own more than 50 trees; however, accounted 80% respondents were willing to plant sandalwood. The paper highlighted that traditional sandalwood management practices during the early sandalwood trade contributed to the sustainable, environmentally sound nature of the sandalwood natural production system. Conversely, induced sandalwood management practices, in general, lead to overexploitation and social distrust, creating unsustainable sandalwood production. The paper suggested that sandalwood cultivation should focus on private land in Mamar, and that regulations and technical standards for sandalwood production and trade should be designed to increase participation and promote sustainable, environmentally friendly dryland management. Sandalwood trees should receive special consideration and be valued more in biodiversity and carbon credit schemes to attract more upland farmers to plant and conserve them.