The effect of chip size on hemicellulose extraction of wood and technological properties of flakeboard were investigated. Three different sizes of wood chips were treated with hot water in a digester at 170 °C for 90 min. After hydrothermal treatment, the wood chips were washed with water and then dried in a dryer. Flakes were produced from control and treated chips using a flaker. Flakeboards were produced from the flakes using urea-formaldehyde resin. The results showed that chip size had a significant effect on the chemical properties of hydrothermally treated wood under pressure in hot water. As chip size was decreased, the amounts of extractives and hemicelluloses decreased in the wood, while the amounts of cellulose and lignin increased. As for the physical properties of the flakeboards, thickness swelling and water absorption significantly decreased with decreasing chip size. There were significant differences in the flexural strength and internal bond strength of the flakeboards produced from untreated and treated chips. The internal bond strength of the flakeboards improved with decreasing chip size. Flakeboards produced from the flakes of hydrothermally treated chips (thickness: 7.4 mm, width: 9.2 mm, and length: 38.5 mm) showed optimum physical and mechanical properties.