Sawmills produce side products that cannot be used in the pulp industry. They can, however, be used as fuel in the sawmill or elsewhere. Mass and energy flows in a sawmill are studied, using data from a Swedish sawmill. Design parameters are calculated for the dewatering and boiler capacities when a wood fuel dryer is coupled to the wood product dryer in the sawmill. The energy used for evaporation in the wood fuel dryer is used in the drying kilns. The useful work potential (exergy) is used to measure the quality improvements of the energy resource when a coupled wood fuel dryer is installed. Two pairs of cases are defined and studied. The first pair only involves material from the sawmill. In the second pair, wood residues are added until the wood fuel dryer uses the full heat demand from the drying kilns. The heat demand from the drying kilns is sufficient as a heat sink for a wood fueldryer for drying all the side products from a sawmill even if the bark is dried and the sawmill produces large amounts of side products. The sawmills have the potential to play a leading role in the market for processed wood fuel. To install coupled dryers in the way that is suggested here into sawmills is a good example of how to use the limited wood fuel resources efficiently. (c) 2006 Elsevier Ltd. All rights reserved.