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There are no instructions on the management of stands of Norway spruce [Picea abies (L.) Karst.] in which butt rot caused by Heterobasidion annosum coll. (Fr.) Bref. was not discovered until the time of first thinning. A stochastic simulation model describing the spread of butt rot in a stand of Norway spruce was used with a new submodel describing the butt rot of young trees. Non-linear stochastic optimization was used to determine the most profitable management schedule of a young Norway spruce stand with butt rot. If the initial level of butt rot was 5% or 10%, or the stand was thinned in summer with stump treatment, one thinning with a rotation of 55 yrs was optimal. Two winter thinnings with a rotation of 61 yrs was optimal in an initially healthy stand. Optimizations indicated that silvicultural measures that decrease the transfer of H. annosum to next generation at clear-cuttings could be economically fulfilled.