In Sweden, large amounts of wood waste are generated annually from construction and demolition activities, but also from other discarded products such as packaging and furniture. A large share of this waste is today recovered and used for heat production. However, previous research has found that recovered wood waste (RWW) contains hazardous substances, which has significant implications for the environmental performance of recycling. Improved sorting is often suggested as a proper strategy to decrease such implications. In this study, we aim to analyse the impacts of waste regulation on the contamination of RWW. The occurrence of industrial preservative-treated wood, which contains several hazardous substances, was used as an indicator for contamination. First the management of RWW during 1995-2004 was studied through interviews with involved actors. We then determined the occurrence of industrial preservative-treated wood in RWW for that time period for each supplier (actor). From the results, it can be concluded that a substantially less contaminated RWW today relies on extensive source separation. The good news is that some actors, despite several obstacles for such upstream efforts, have already today proved capable of achieving relatively efficient separation. In most cases, however, the existing waste regulation has not succeeded in establishing strong enough incentives for less contaminated waste in general, nor for extensive source separation in particular. One important factor for this outcome is that the current market forces encourage involved actors to practice weak quality requirements and to rely on end-of-pipe solutions, rather than put pressure for improvements on upstream actors. Another important reason is that there is a lack of communication and oversight of existing waste regulations. Without such steering mechanisms, the inherent pressure from regulations becomes neutralized.