Measuring and determining properties of materials can be done in many various ways. One of these ways are inverse methods. When using inverse methods to measure properties, the target property is not the one being measured. Another property connected to the target property through a mathematical equation is measured instead. Solutions of inverse methods are derived from the differential equation form of the laws defining the properties. Solving the differential equations leads to concrete solutions of inverse problems. Inverse methods were used to determine some physical properties in three chosen wood species – Norway spruce (Picea abies, L.), European beech (Fagus sylvatica, L.) and sessile oak (Quercus petraea, Matt. Liebl.). The wood species were intentionally degraded by a white-rot fungus Trametes versicolor, L. Degradation of wood changes both physical and mechanical properties of wood. This change can be positive towards a different use of such material, a thermal insulation for example. Degradation process in wood causes mass loss, increase in porosity of wood and a low thermal conductivity value was determined as well. Low density, high porosity and a low thermal conductivity are characteristic properties of thermal insulation materials. The thermal conductivity values of degraded wood are close or similar to thermal conductivity values of other experimental bio-based thermal insulating materials.