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Sustainable use of wood may contribute to coping with energy and material resource challenges. The goal of this study is to increase knowledge of the environmental effects of wood use by analyzing the complete value chain of all wooden goods produced or consumed in Switzerland. We start from a material flow analysis of current wood use in Switzerland. Environmental impacts related to the material flows are evaluated using life cycle assessment-based environmental indicators. Regarding climate change, we find an overall average benefit of 0.5 tonnes carbon dioxide equivalent per cubic meter of wood used. High environmental benefits are often achieved when replacing conventional heat production and energy-consuming materials in construction and furniture. The environmental performance of wood is, however, highly dependent on its use and environmental indicators. To exploit the mitigation potential of wood, we recommend to (1) apply its use where there are high substitution benefits like the replacement of fossil fuels for energy or energy-intensive building materials, (2) take appropriate measures to minimize negative effects like particulate matter emissions, and (3) keep a systems perspective to weigh effects like substitution and cascading against each other in a comprehensive manner. The results can provide guidance for further in-depth studies and prospective analyses of wood-use scenarios. [ABSTRACT FROM AUTHOR]