A veneer lathe in which a log is rotatably supported, and powered endless chain members having sharpened projections on their outer side are employed to rotatably drive the log. A knife is provided at the log surface so that the log is cut in a circumferential direction as the knife moves toward the longitudinal axis of the log and the log rotates. Log pressure means are provided to press the log surface adjacent the knife edge, and a conventional transport mechanism moves the assembly of the endless chain members, the knife, and the log pressure means toward the longitudinal axis of the log in synchronization with the log rotation so that a veneer is continuously cut from the log.