According to the Environmental Protection Agency, buildings account for 38% of the United States' carbon dioxide emissions, providing architects and structural engineers a unique opportunity to mitigate a significant factor driving climate change by implementing innovative and sustainable technology in infrastructure design. Wood and mass timber products are becoming an increasingly popular alternative building material due to their economic and environmental benefits. The natural growth of wood leads to highly heterogeneous material properties. Defects such as checks, knots, and localized slope of grain contribute to some of this variation; however, wood properties vary significantly even in clear wood. Using mass timber products, like Cross Laminated Timber (CLT), creates an averaging effect of constituent board material properties and reduces the effects of defects. Thus, this research aims to understand and characterize the influence of the material property heterogeneity of constituent boards on CLT panel behavior and performance. Specifically, a two-dimensional and three-dimensional probabilistic model for the distribution of knots in dimensional lumber is developed, which allows for the simulation of synthetic samples calibrated to any softwood species. Additionally, parallel and perpendicular compressive properties of Eastern hemlock are experimentally determined to serve as input for a constitutive model to predict Eastern hemlock constituent board and CLT behavior. Nonlinear three-dimensional finite element models are developed to investigate the impact of knots on effective stiffness and strength, stress path, and location of yielding initiation. The relationship between knot defects and reduced strength and stiffness of dimensional lumber is fundamental to visual grading methods. The correlation between knot defect geometry and MOE/MOR was investigated in Eastern hemlock and Sitka spruce. Finally, the Variability Response Function (VRF) is applied to CLT to investigate the impact of lengthwise variability in MOE of constituent boards on the variance in displacement response of CLT. Basic conclusions include: Development of a probabilistic model for the distribution and geometry of knots in dimensional lumber Orthotropic compressive properties of Eastern hemlock Knots have a greater impact on effective stiffness and strength in tensile loading than compressive loading A method to understand the influence of constituent board properties on CLT performance