A liquefied wood-based resol resin was prepared with excellent yield by a reaction of liquefied wood and formaldehyde under alkaline conditions. The effects of various reaction parameters on the extent of the yield of the resol resin, unreacted phenol content, and viscosity were investigated. Milder resol resinification conditions were required as compared to those used in conventional methods. The liquefied wood-based resol resin was successfully applied to produce phenolic foam using appropriate combinations of foaming agents. Diisopropyl ether with a relatively higher boiling temperature was suitable for the foaming of liquefied wood-based resol resin. Hydrochloric acid and poly(ethylene ether) of sorbitan monopalmitate were used as a catalyst and a surfactant, respectively. The obtained foams showed satisfactory densities and compressive properties, comparable to those of foams obtained from conventional resol resin. Foams with low density were obtained by the blending of liquefied wood-based resol resin and conventional resol resin.