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I am building a small loft style apt for my wife and me in Illinois. The building is a rezoned factory with apartments in it. I'm going to pick a wing and build a place for us to stay 'till our house is done.

I want to use 1/4 inch plywood as my main wall - burned stained and cleared looks very nice. I saw it somewhere else and would like to do it, kinda gives the room a rustic cabin look.

Do I have to use drywall on the inside walls or can I use wood paneling for the walls?

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    The answer will probably depend on your location if you're wondering about whether you're allowed to do this. If you're just looking for recommendations, that might be different. – PhilippNagel Jun 27 at 1:49
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    Is wood paneling as a finish material over drywall an option, or is there a reason that wouldn't work for you? – ThreePhaseEel Jun 27 at 1:52
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    Also, where are you on this planet, and what sort of building is this loft going into? – ThreePhaseEel Jun 27 at 1:55
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    so i tried to put the state Illinois in the question but this site wouldnt let me anyway i want to use 1/4 inch plywood as my main wall burned stained and cleared looks very nice i saw it somewhere else and would like to do it, kinda gives the room a rustic cabin look – Paris Lee Pennington Jun 27 at 2:09
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    The question that should be asked is - for this building's interior, is the external apartment walls already zoned as fire seperation walls? If so the answer is it doesn't matter. If not the answer may be 3/4" drywall to an array of things you need to do. Who is signing off on your apartment meeting fire code? You will have much more requirements since your apartment exterior is a shared wall or at least two sides of it. – DMoore Jun 27 at 2:57
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I doubt that 1/4-inch plywood on studs would satisfy fire codes. You might be allowed to use it on top of 1/2" or 5/8" drywall.

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Can I suggest you clarify your question a bit further? Are you asking about using plywood for the exterior walls, as exterior wall sheathing, or instead of drywall for the interior partitions? Or both?

For the exterior walls, you certainly can use plywood. It needs to comply with the ICC regulations (I assume you live in the US); chapter 23 of ICC deals with wood elements in detail, how they need to be pressure treated, humidity levels, drying, etc. It also deals with minimum member thickness and exposure durability classification if they will be exposed or used as sheathing elements.

For interior walls, you need to determine if walls must be fire rated. The keyword in your question is loft: will there be doors inside the flat? If so, fire rating comes in place. If it's a true loft with NO doors, there's no fire rating to be considered, and you can use any material. But you'll probably build a bathroom, and you'll want a door there, which means you need to make sure the material for the bathroom partitions meet fire codes.

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