Conventional methods of analysing satellite images were capable of spotting only clear-cut swathes of land, where all the trees are removed for farming or grazing.
Selective logging means individual trees are picked out of the forest.
Researchers at the Carnegie Institution of Washington used a new method to analyse satellite images and detected selective logging in the five major timber production states of the Brazilian Amazon.
The report, published in Friday's issue of the journal Science, showed that the size of the damaged forest, taking into account selective logging, was between 60% and 128% higher than the officially deforested area between 1999 and 2002.
"We expected to see large areas of logging, but the extent to which logging penetrates deep into the frontier is much more dramatic than we anticipated," said Michael Keller of the US Forest Service, who helped write the report.
Brazil's fast-growing agricultural frontier and new road projects in recent years have led to the devastation of areas larger than the US state of New Jersey. More recent official figures suggest a slowing of the destruction in 2005.
The government acknowledged the merit of the study but said it overestimated the extent of selective logging.
"The lumber industry doesn't have the capacity to process such volumes," said Tasso Azevedo, the Environment Ministry's forestry director.
"Yet if we apply this study at a large scale in real-time, we may one day be a step ahead of illegal logging," he added.
"We expected to see large areas of logging, but the extent to which logging penetrates deep into the frontier is much more dramatic than we anticipated"
US Forest Service
"Compared with clear-cutting, selective logging is the lesser of the two evils and not directly to blame for massive deforestation in the Amazon," said Jose Natalino Silva, of Empresa Brasileira de Pesquisa Agropecuoria-Amazonia Oriental in Paro, Brazil.
"The problem is it opens roads to massive clearing for agriculture," added Silva, who worked on the report.
Selective logging, the report said, increased the flow of carbon from the Amazon forest into the atmosphere by 25%.
It also thins the shady canopy and causes damage to the undergrowth, making forests drier and more flammable.
"When you knock down a tree it causes a lot of damage in the understory," said Gregory Asner of the Carnegie Institute of Washington in Stanford, California, who led the study.
The researchers said they would provide the results of the study to the Brazilian government to help tackle illegal, selective logging.