Plywood is a composite material manufactured from thin layers, or "plies", of wood veneer that are glued together with adjacent layers, having their wood grain rotated up to 90° to one another. It is an engineered wood from the family of manufactured boards, which include medium-density fibreboard (MDF), oriented strand board (OSB), and particle board (or chipboard).

All plywoods bind resin and wood fibre sheets (cellulose cells are long, strong and thin) to form a composite material. This alternation of the grain is called cross-graining and has several important benefits: it reduces the tendency of wood to split when nailed at the edges; it reduces expansion and shrinkage, providing improved dimensional stability; and it makes the strength of the panel consistent across all directions. There is usually an odd number of plies, so that the sheet is balanced—this reduces warping. Because plywood is bonded with grains running against one another and with an odd number of composite parts, it has high stiffness perpendicular to the grain direction of the surface ply.