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Bioenergy, mostly from wood biomass, is now widely seen as an important element in the efforts to tame dangerous climate change. At the same time, foresters and development specialists note that wood-based energy production can contribute to rural development. However, to deliver on these two goals without generating negative side effects, wood-based energy has to be sustainable, while currently, the sector is developing rapidly in ways that are technologically advanced, with questionable sustainability. How can sustainability be achieved in bioenergy production, to make it a viable element of climate change mitigation, adaptation, and rural development? Arguing for the need to mainstream sustainability thinking into wood-based energy production, the article draws on a critical literature review to identify four different levels of sustainability in the existing research on bioenergy from wood. It shows two possible strategies for integrating sustainability in wood bioenergy production. A top-down approach draws on global forestry governance instruments, while a bottom-up approach uses best-practices in forest plantations for bioenergy purposes, as illustrated by a case study from rural Paraguay. Using aggregated and visualized sustainability indicators, the article exemplifies what sustainable bioenergy production means in more tangible terms.