Prefabricated engineered solid wood panel construction systems can sequester and store CO2. Modular cross-laminated timber (CLT, also called cross-lam) panels form the basis of low-carbon, engineered construction systems using solid wood panels that can be used to build residential infill developments of 10 storeys or higher. Multi-apartment buildings of 4 to 10 storeys constructed entirely in timber, such as recently in Europe, are innovative, but their social and cultural acceptance in Australia and North America is at this stage still uncertain. Commercial utilisation is only possible if there is a demand and user acceptance.This paper explores the opportunities offered by an innovative low carbon construction system using cross-laminated timber (CLT) panels to improve the design and delivery of urban infill housing. CLT construction has been developed around 1996 in Austria: layers of timber boards are glued crosswise in different directions to increase loadbearing capacity. The paper describes a multi-disciplinary research project into cross-laminated timber panels which aims to transform the Australian construction and development industry, involving a range of key partners. This project will introduce cross-laminated timber panels as a way to build with a lightweight prefabricated low-carbon construction system that is advantageous for urban infill and residential buildings in the range of 4 to 8 stories height. The challenges, research questions and advantages of this new engineered timber system are explained, and a detailed research methodology for further research is presented.