Hydrothermal modification represents a promising pathway for upgrading European beech wood ( L.), particularly in the presence of false heartwood, which is traditionally regarded as a limiting defect in industrial processing. This chapter explores the potential of saturated steam treatment as a controlled, environmentally compatible approach to transform the intrinsic variability of beech wood into a functional and aesthetic advantage. Attention is given to the interaction between process parameters—temperature, time, and moisture regime—and the resulting structural and chemical changes in wood. Hydrothermal treatment induces selective degradation of hemicelluloses, modification of lignin, and reorganization within lignin–carbohydrate complexes, leading to the formation of new chromophoric structures. These transformations are directly reflected in the optical response of wood, manifested as colour darkening and, importantly, homogenization between mature wood and false heartwood. The chapter further examines the stability of the modified colour under indoor ageing conditions, demonstrating that hydrothermal treatment contributes to improved resistance against light-induced changes. Despite these benefits, the treatment does not substantially enhance biological durability against wood-decaying fungi at the applied temperatures, highlighting the limits of low-temperature hydrothermal processes. From a technological and application-oriented perspective, the ability to unify colour without compromising structural integrity offers a significant advantage. By reducing the visual disparity within beech wood, hydrothermal treatment enables higher material yield and opens new opportunities for its utilization in design-oriented and value-added products. This approach aligns with current demands for sustainable material solutions while expanding the functional potential of a widely available hardwood resource.