The wood industry is facing some serious challenges in how end users view the long-term reliability of wood construction systems. The 1990s have seen the industry hit with a series of high-profile wood product failures due to decay, for example in North Carolina and coastal British Columbia. There are several efforts underway in North America and around the world focused on developing predictive models for moisture conditions in exterior wall systems. All of these models can predict temperature and wood moisture content change over time, but the consequences of those conditions in terms of decay are not yet predictable. While it is known that wood below 20% moisture content will not decay and wood above 28% moisture content will decay, fungal response to conditions between 20 and 28% is not well documented, particularly for North American fungi and wood species. Forintek Canada Corp. has a project underway to determine the time required for wood products to suffer detectable strength loss under a variety of temperature and moisture conditions. The focus is on sheathing as it is the last place to dry out after wetting events. Since this project was initiated, other researchers have become involved in this issue and it is therefore timely to review the state of the knowledge in this area. There is a considerable volume of work published and a limited amount of work underway but little of this is directly relevant to developing damage functions for hygrothermal models. The work underway at Forintek needs to be completed to define the time to initiation of decay under constant moisture conditions. Further work needs to be done to define the time to initiation of decay under fluctuating conditions. Data on the initial rate of decay under limiting conditions should also be generated from this work.