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Woodfuels in developing countries, particularly Africa, remain a basic need for urban households, who depend heavily on them for their energy needs. This work examines the confusion about the environmental and social impacts of woodfuel use, and the structure of informal sector woodfuel markets. Using data from a year of survey field work in Tanzania, the author questions assumptions of poorly functioning woodfuel markets and their impact on environment and society. Approaching the unregulated woodfuel markets as industrial organizations, the author uses a classic structure previously applied to developed markets in industrialized countries, to determine the competitiveness and efficiency of woodfuel markets. Results indicate well-functioning makets under most circumstances and the study details the variables which enhance market sustainability. The social and environmental implications of woodfuel use as it exists, and suggestions to policymakers for improvements to enhance the sustainability of the system and the environment, complete the study. The study should be useful for those interested in energy and environmental issues or informal markets (including agricultural markets) in developing countries, and to those interested in industrial organization as applied to the Third World.