Sawdust concrete has some shortcomings due to the harmful effects of some organic soluble components existing in the sawdust which affects setting and strength of sawdust concrete. Also, volume changes of sawdust as an aggregate due to variation of moisture content, cause large volume changes in the sawdust concrete. In this work, sawdust was treated before using as an aggregate for making sawdust concrete. The treatment included boiling the sawdust in water containing hydrated lime in order to dissolve all soluble organic components. To reduce water absorption of sawdust, it was dried and treated with waterproofing material. Two types of waterproofing materials were used (cutback asphalt and classic varnish). The properties of sawdust concrete were highly improved using pretreated sawdust. The increase of compressive strength was up to 50% for moderate sawdust ratios. Flexural strength is also increased, water absorption and thermal conductivity were highly reduced, while the basic advantages of sawdust concrete such as lightness of weight, sawability and nailability were not affected.