In addition to filtering some sediments, hydrophobic wood sponges can also absorb many organic solvents, particularly crude oil. The leakage of crude oil poses a serious threat to the marine ecosystem, and oil mixed with water also generates great danger for its use. From the perspective of low cost and high performance, wood sponges exhibit great potential for dealing with crude oil pollution. Wood sponge is a renewable material. With a highly oriented layered structure and a highly compressible three-dimensional porous frame, wood sponges are extremely hydrophobic, making them ideal for oil–water separation. Currently, the most common approach for creating wood sponge is to first destroy the wood cell wall to obtain a porous-oriented layered structure and then enhance the oil–water separation ability via superhydrophobic treatment. Wood sponge prepared using various experimental methods and different natural woods exhibits distinctive properties in regards to robustness, compressibility, fatigue resistance, and oil absorption ability. As an aerogel material, wood sponge offers multi-action (absorption, filtration) and reusable oil–water separation functions. This paper introduces the advantages of the use of wood sponge for oil–water separation. The physical and chemical properties of wood sponge and its mechanism of adsorbing crude oil are explained. The synthesis method and the properties are discussed. Finally, the use of wood sponge is summarized and prospected.