The construction industry is a major contributor to greenhouse gas emissions, mostly due to conventional materials production. Because of this, there is an urgent need for sustainable alternatives. Bio-based materials offer a promising alternative but remain underutilized. This study examines wood to derive insights that could support the broader adoption of bio-based alternatives. This research explores the systemic drivers and barriers to the diffusion of wood through interviews with key actors. A system dynamics model is developed to capture the main factors affecting wood diffusion and their interdependencies. …It shows that successful diffusion requires systemic innovation, necessitating collaboration across the ecosystem. This systemic analysis offers important insights for other bio-based materials, which differ in resource availability, applications, and production cycles, but face similar barriers such as workforce shortages, scalability, and societal acceptance. Overcoming these barriers requires targeted trainings and supportive policies.