This paper presents a novel approach to microwave non-contact, non-destructive testing of wood, investigating additional indicators of wood structure, in particular the significance of wave polarization in transmission measurements. Contribution of wave polarization to wood characterization is studied, considering detection of rapid and gradual variations in wood structure, determination of moisture content and density distribution along the sample, as well as bulk properties detection. A set of microwave sensors in a collinear arrangement was used in two orthogonal linear polarizations. Significant findings are reported, in particular polarization dependence of moisture related attenuation, as well as improved defect detection accuracy when measurements in two orthogonal linear polarizations are considered. In addition, sorting wood samples into categories is considered and the advantages of this approach are presented.