Machine lumber grading has been applied in commercial operations in North America since before 1963, and research has shown that machine grading can improve the efficient use of wood. However, industry had been reluctant to apply research findings without clear evidence that the change from visual to machine grading would be a profitable one. Since 2000, when the most recent version (FPL-GTR-7) of this report was published, new equipment, production scenarios, forest resource changes, and other issues have arisen, resulting in the need for another update. This new report provides key access to American Lumber Standard Committee information including the Machine Graded Lumber Policy and current approved equipment to help mill managers assess the feasibility of machine grading for their products. The first part of this report discusses principles of using machine grading to assign properties. The second part presents methods of machine-graded lumber yield assessment. The final part discusses mill mechanical analysis and cost analysis.