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Douglas-fir (Pseudotsuga menziesii (Mirb.) Franco) forests managed for timber in western Oregon frequently lack structure and diversity associated with old-growth forests. We examined thinning effects on overstory and understory development for 8 years after treatment. Three 30- to 33-year-old Oregon Coast Range plantations were partitioned into four overstory treatments: unthinned (~550 trees/ha) and lightly (~250 trees/ha), moderately (~150 trees/ha), and heavily (~75 trees/ha) thinned. Within each overstory treatment, two understory treatments were established: underplanted with Douglas-fir and western hemlock (Tsuga heterophylla (Raf.) Sarg.) or not underplanted. Thinning increased overstory stem growth, crown expansion, and retained crown length. Thinned overstory canopies began to close rapidly the third year after thinning, decreasing % skylight by approximately 2%/year, whereas % skylight in unthinned stands increased slightly. All seedlings planted in unthinned stands died, whereas eighth year survival in thinned stands averaged 88%. Natural regeneration densities and distributions were highly variable. Understory shrub cover was reduced by harvesting disturbance but recovered by the fifth year. Thinning increased understory plant species diversity, and no shrub species were lost. Thinning to low densities and underplanting has the potential to accelerate development of multilayered stands characteristic of old-growth Douglas-fir forests.