The invention concerns a method for peeling veneer from a log (2). Veneer (4) is peeled tangentially from the circumferential surface of a log rotated around its longitudinal axis under conditions determined by the distance (knife gap) between the knife (3) and the nose bar pressing the surface of the log immediately in front of the cutting point. The peeling knife as well as the nose bar is moved towards the rotation axis of the log corresponding the proceeding of the peeling. At the ending stage of the peeling, the distance between the peeling knife and the nose bar is reduced substantially in accordance with the thickness of the veneer being peeled.