Spalted wood, wood colored by fungi, has been popular in woodcraft for centuries. Most spalted wood, however, is found in an advanced state of decay and cannot be utilized. This project describes the use of viscoelastic thermal compression (VTC) to investigate the potential increase in spalted woods’ strength and stiffness, with the main objective of converting so-called “punky” wood into the top layer (veneer layer or “coating”) on commercial flooring. Spalted Acer macrophyllum logs were cut into veneers of size 7 mm × 7.8 cm × 25 cm and were then VTC-treated at 150 °C and 50 psi for 11.5 min. Statistical analysis on the mixed linear models showed significant increases for both the density and hardness of spalted wood (p < 0.0001). Density and Brinell hardness increased by 84% and 209%, respectively. FTIR analysis revealed that the wood polymers present in spalted wood were more susceptible to degradation imposed by the heat of the VTC treatment compared to sound wood. Additionally, the color analysis of the wood specimens showed statistically significant changes in color after the VTC treatment (p < 0.0001), which turned the wood surface darker and redder. The use of the VTC technology to transform spalted wood into wood flooring is viable. However, when exposed to moisture, the VTC-treated spalted wood showed a high percentage of set recovery (78%), which was significantly different from the set recovery of the sound wood (71%, p = 0.004). Successful use of VTC-treated spalted wood for flooring will require addressing of the swelling issue, and additional studies are needed to fully characterize the anatomy of VTC-treated spalted wood.