Bedding material is an important requirement of floor-based poultry production systems to meet the health and welfare requirements. This substrate can be an organic material like wood or plant-based material or inorganic material like clay and sand and should generally be a good absorbant, easily available, comfortable and nontoxic to birds. Wood is an organic renewable resource having good humidity regulation and antimicrobial properties and its by-products are commonly used as poultry litter in many countries. For example, in France, wood-based bedding is used in 80% of turkey production. This litter has approximately 50% lower NH3 production compared to other materials like sand and hulls, and has multiple environment-friendly disposal options. Moreover, the birds grown on such litter show better health and welfare and they prefer to practice their natural behaviours on this material which is helpful for the amelioration of physiological status and reduction of locomotion injuries. Moreover, according to some studies, the birds show improvement in different performance parameters, for example, up to 5-7% improvement in daily weight gain, live body weight, feed conversion ratio (FCR) and survivability. These improvements may differ depending upon the production system and type of wood material used in experiments, still it can be concluded that wood-based bedding materials do not negatively affect the production potential of poultry. In addition, the antimicrobial potential of wood may help to counter the load of certain pathogens in environment of birds. This review describes the physiochemical properties of wood-based bedding materials and their role in production and welfare of poultry.