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Plywood is a type of engineered board made from thin sheets of wood, called plies or wood veneers. The layers are glued together, each with its grain at right angles to adjacent layers for greater strength. There are usually an odd number of plies, as the symmetry makes the board less prone to warping , and the grain on the outside surfaces runs in the same direction. The plies are bonded under heat and pressure with strong adhesives, usually phenol formaldehyde resin, making plywood a type of composite material. Plywood is sometimes called the original engineered wood. The adhesives used in plywood has become a point of concern, due to the off gassing of the formaldehyde. Both urea formaldehyde and phenol formaldehyde are carcinogenic, so their use undesirable. Many manufacturers are turning to "Greener Products" as government regulations become stronger against the use of these adhesives. A common reason for using plywood instead of plain wood is its resistance to cracking, shrinkage, twisting/warping, and its general high degree of strength. It has replaced many dimensional lumbers on construction applications for these reasons.

CDX plywood is produced by gluing together sheets of veneer, with each layer being glued the opposite grain to the one below it. The result is a wooden sheet that is proportionally as strong as steel, without the weight that comes along with concrete or steel. Because of this strength, CDX plywood is the most popular choice for interior flooring; CDX plywood will stand up to many years of use and abuse without warping or breaking.

OSD plywood (which is also commonly known as OSB or oriented strand board) is produced by binding wood chips together with a mix of glue and resin. The mixture is then cast and baked to produce a plywood-like sheet. Because OSD does not use costly veneers it is as much as half the price of regular plywood. OSD also tends to have better waterproof characteristics, since the glue and resin make the wood chips impervious to moisture that can seep in between the plies of standard plywood. This means that OSD is the perfect choice for applications such as exterior wall sheathing and roofing.

The differences between the two plywood board types CDX plywood is classified as an "exposure" type of sheathing rather than an "exterior." This means that CDX plywood should only be used inside or on surfaces that will not be exposed to water once the building process is complete. Because of its chemical properties, however, OSD is perfect for exterior applications. Another difference between the two plywood board types is appearance: if you are looking for a wood grain, choose CDX, since OSD plywood is generally flat on one side and rough on the other. A good builder can save money by using both OSD and CDX plywood.

AC plywood is the top grade of standard pine or fir plywoods. One side has been sanded so that it is left smooth, and the other remains rough. It is not unusual to find what are called "footballs", or plugs in the smooth side. These footballs are inserted where knots used to be.

AC is sometimes used as the layer directly underneath flooring as well. It is also often used for projects that require a smooth outside, but don't need a finished back, as with desktops or bookcase backs.

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