Over the last decades, environmental law has significantly contributed to limiting the environmental impacts of our mode of living. Yet environmental problems still prevail and are strongly linked to our production and consumption systems. Therefore, the current challenges must be tackled with a systemic approach. The concept of transformative environmental policy identifies approaches for policymakers to interfere in socio-economic systems in order to give them a more sustainable structure. This article seeks to identify the contributions that law can make to a transformation towards sustainability. For illustrative purposes, I point out the concrete steps in a case study on increasing the use of timber in buildings construction in Germany. I argue that law plays a role in all three phases of a transformation/transition. The legal framework must enable innovations and experiments in the first transformation phase, come up with restricting regulations for old non-sustainable structures in the second phase, and in the third phase provide course stability for the new system. I conclude that the concept of transformative environmental policy helps to design adaptations of the legal framework in order to transform socio-economic and socio-technical systems towards more sustainability.