Shear walls provide the lateral resistance needed for light-frame wood structures to withstand earthquake and wind loads. When sheathed with wooden structural panels, shear walls can be strong, stiff, and ductile. This is a study on the effect of wood species and drying temperature of veneer on the suitability of plywood for use in shear walls resisting earthquake loads. The highest lateral nail strength values were obtained from plywood panels manufactured from black pine veneers dried at 160 degrees C. Group C (black pine) showed the highest maximum load values and the greatest displacement at ultimate load, whereas Group A (Scots pine) showed the lowest maximum load values and the least displacement at ultimate load. The stiffness values (2.38, 2.52, and 2.28 for Groups C1, C2, and C3, respectively) in Group C were higher than those of the other groups. The results exceeded the values for standards described in National Design Specification for Wood Construction and ISO 16670 and also met the values in American Plywood Association Form L350G for diaphragms and shear walls. Shear strength mean values obtained from the samples of all plywood panels were above the limit value (1.0N/mm2) indicated in the EN 314-2 standard. The highest shear strength mean value was obtained from Group C (1.86N/mm2). It was also found that the bending strength of plywood panels was higher than the minimum values for structural purpose plywood panels (40N/mm2) indicated in Deutsches Institut fur Normung (DIN) 68705-3. The bending strength values (above 80N/mm2) of Group C exceeded twice the standard. The plywood panels were all manufactured from softwood species growing in Turkey, because producing plywood from softwood may prove to be a new opportunity for sustainable forestry in Turkey.