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The thermal degradation of wood is affected by a number of process parameters, which may also cause variations in the resistance against decay fungi. This study compares changes in the chemical composition, water-related properties and decay resistance of Scots pine sapwood that was either thermally modified (TM) in dry state at elevated temperatures (≥ 185 °C) or treated in pressurized hot water at mild temperatures (≤ 170 °C). The thermal decomposition of easily degradable hemicelluloses reduced the mass loss caused by Rhodonia placenta, and it was suggested that the cumulative mass loss is a better indicator of an actual decay inhibition. Pressurized hot water extraction (HWE) did not improve the decay resistance to the same extent as TM, which was assigned to differences in the wood-water interactions. Cross-linking reactions during TM caused a swelling restraint and an effective reduction in moisture content. This decreased the water-swollen cell wall porosity, which presumably hindered the transport of degradation agents through the cell wall and/or reduced the accessibility of wood constituents for degradation agents. This effect was absent in hot water-extracted wood and strong decay occurred even when most hemicelluloses were already removed during HWE.