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In this study, we used material flow analysis and life cycle assessment to quantify the environmental impacts and impact reductions related to wood consumption in Japan from 1970 to 2013. We then conducted future projections of the impacts and reductions until 2050 based on multiple future scenarios of domestic forestry, wood, and energy use. An impact assessment method involving characterization, damage assessment, and integration with a monetary unit was used, and the results were expressed in Japanese yen (JPY). We found that environmental impacts from paper consumption, such as climate change and urban air pollution, were significant and accounted for 56% to 83% of the total environmental impacts between 1970 and 2013. Therefore, reductions of greenhouse gas, nitrogen oxide, and sulfur oxide emissions from paper production would be an effective measure to reduce the overall environmental impacts. An increase in wood use for building construction, civil engineering, furniture materials, and energy production could lead to reductions of environmental impacts (via carbon storage, material substitution, and fuel substitution) amounting to 357 billion JPY in 2050, which is equivalent to 168% of the 2013 levels. Particularly, substitution of nonwooden materials, such as cement, concrete, and steel, with wood products in building construction could significantly contribute to impact reductions. Although an increase of wood consumption could reduce environmental impacts, such as climate change, resource consumption, and urban air pollution, increased wood consumption would also be associated with land-use impacts. Therefore, minimizing land transformations from forest to barren land will be important.