Wood (timber) is an important raw material for various purposes, and having biological composition it is susceptible to deterioration by various agents. The history of wood protection by impregnation with synthetic chemicals is almost two hundred years old. However, the ever-increasing public concern and the new environmental regulations on the use of chemicals have created the need for the development and the use of alternative methods for wood protection. Biological wood protection by antagonistic microbes alone or in combination with (bio)chemicals, is one of the most promising ways for the environmentally sound wood protection. The most effective biocontrol antagonists belong to genera Trichoderma, Gliocladium, Bacillus, Pseudomonas and Streptomyces. They compete for an ecological niche by consuming available nutrients as well as by secreting a spectrum of biochemicals effective against various fungal pathogens. The biochemicals include cell wall-degrading enzymes, siderophores, chelating iron and a wide variety of volatile and non-volatile antibiotics. In this review, the nature and the function of the antagonistic microbes in wood protection are discussed.