Objectives  Through the study of the world’s forest characteristic town construction model−Karuizawa Forest Town in Nagano Prefecture, Japan (referred to as “Karuizawa”), the paper summed up the construction mode of Japanese forest characteristic towns, and the study of the revelation of the construction of China’s forest characteristic towns.

  Methods  Firstly, literature analysis wascarried out on the development history and construction mode of forest characteristic towns in China and Japan. Secondly, combined with field research, local real estate and tourism practitioners in Karuizawa were visited, and in-depth interviews were conducted on the local resource endowment, industrial foundation, and development mode. Lastly, Karuizawa Forest Characteristic Town was selected as a typical case to analyze and research.

  Results  After more than 130 years and four periods of construction, Karuizawa has perfected a comprehensive transport network, including external high-speed railways and motorways, and internal circular transport; formulated a series of laws and regulations for the protection of the natural environment and the control of uncontrolled commercial development. Also, Karuizawa built a series of museums, art galleries, hotels, and lodgings that combine humanistic and natural landscapes with high artistic value; attracting the participation of famous domestic enterprises in the construction of the Karuizawa Forest, fostering new businesses such as weddings, conferences, and bird-watching; which developed a green industry that cultivated, collected, and initially processed agricultural and forestry products; and formed the Karuizawa style of life as a platform for innovative development that integrated industry, culture, tourism, and community.

  Conclusions  Drawing on the experience of forest town construction in Japan, the construction path and development mode of China’s forest characteristic town were proposed. To develop a forest town, it is necessary to find out the basic conditions, locate the leading industries, and clarify the development objectives. Environmental protection and economic development can be mutually reinforcing. Meanwhile, government governance needs to integrate the guidance of the central government and the practical operations of local governments, combining top-down and bottom-up approaches for more effective decision-making and policy implementation.