The mountain pine beetle, Dendroctonus ponderosae Hopkins, is currently devastating the lodgepole pine resource in western Canada, and in an attempt to circumvent the problem significant volumes of infested or dead wood are being harvested. In order to fully utilize the killed resource, it is crucial to understand how the pine beetle impacts wood quality. A thorough analysis of beetle-killed and sound lodgepole pine trees indicated that the infested sapwood and heartwood had substantial moisture loss, and that the moisture content decreased with increasing tree height when compared to sound wood. The infested wood was also shown to have a lower specific gravity than sound wood, and tended to decrease with increasing tree height. Chemical analysis indicated that the infested sapwood contained significantly lower concentrations of extractives when compared to sound sapwood, and that extractives content increased towards the crown. Additionally, the infested sapwood also had lower lignin and hemicellulose contents when compared to the sound sapwood. Wood permeability showed that infested sapwood was more permeable than sound sapwood, while the opposite was true for the heartwood, with the sound heartwood being more permeable than the infested heartwood. Permeability in both sapwood and heartwood varied with tree height and correlated with extractives content. These chemical and morphological changes significantly influence the quality of wood and fiber obtained from this substantial resource.