Relatively mild thermal treatments of wood according to a two step process which leads to improved dimensional stability and improved timber performance were investigated by solid phase CP-MAS 13C-NMR to understand at molecular level the reasons for the improvements reported. All the occurrences described appear to be the consequence of reactions which are known in wood chemistry. These are the formation of acetic acid liberated from the hemicelluloses, which further catalyses carbohydrates cleavage, causing a reduction of degree of polymerisation of the carbohydrates. Acid catalysed degradation results in the formation of formaldehyde, furfural and other aldehydes as well as some lignin cleavage at Cα and O4 and believed to cause some aldehyde production from lignin units Cγ, all occurring in the first reaction step. Lignin autocondensation through the cleaved, positively charged benzylic Cα to form some methylene bridges presumably starts already to occur in this first phase. The increase in the number of free reactive sites on the aromatic ring of some lignin units already occurs in this phase but continues into the next. In the second treatment step completion of the autocondensation of lignin is believed to occur through the formation of methylene bridges connecting aromatic rings. The aromatic nuclei sites are released by demethoxylation and through the cleaved, positively charged benzylic Cα. Reactions of some of the aldehyde groups formed in the first step phase occur with lignin aromatic nuclei sites to connect aromatic rings through methylene bridges. The extent of these reactions is mild, but nonetheless they lead to an increase in cross-linking with consequent improvement in dimensional stability and decreased hygroscopicity of wood.