In recent decades, the concept of forest certification under the Forest Stewardship Council (FSC) has been widely adopted in selected Southeast European countries (Bosnia and Herzegovina, Croatia, Serbia, and Slovenia). As sustainability is traditionally recognised as a leading principle in the forest management doctrine in these countries, the aim of this study was to understand whether, and how, FSC forest certification contributes to the sustainable management of state forests. The research was carried out in two phases. First, in order to assess forest management compliance with FSC standard, non-conformities for the period 2014–2018, identified in audit Public Summary Reports, were analysed in all public companies that managed state-owned forests in selected countries. Further, in-depth, semi-structured interviews with the professionals responsible for forest certification in these companies were conducted (n = 11) to determine the contribution of forest certification to the economic, ecological, and social aspects of sustainable forest management. In total, 185 non-conformities were analysed. The results showed that FSC certification was successful in addressing certain problems in forest management practices and contributed to sustainable forest management, mainly covering social and ecological issues. The most frequently identified non-conformities were those related to FSC Principle 4 Community relations and worker’s rights (32.3% of all non-conformities) and Principle 6 Environmental impact (30.4% of all non-conformities). The contribution of FSC certification to sustainable forest management is mainly reflected in the following aspects: Worker’s rights; health and safety of employees; availability of appropriate personal protective equipment; consultation with local people and interest groups; awareness of environmental impacts of forestry operations; waste disposal and storage of fuel; improving the image of forest companies and maintenance of high-conservation-value forests. The majority of non-conformities were minor and required procedural changes to be closed. Moreover, there are no statistically significant differences between the countries with regard to the number of non-conformities for all principles. It can be concluded that FSC certification, as a market-driven mechanism, plays an important role by influencing forest management practices and business operations of public forest companies in a positive manner.