A low-density wood fiber insulation panel (WIP) composite was developed with 100 % petrochemical-free, bio-based binder with high mechanical strength, water resistance and thermal insulation properties. This study investigated the manufacturing process of composite WIPs made with mechanical pulp fibers with cellulose nanofibrils (CNFs), lignin-containing CNFs (LCNFs), hybridized CNFs-LCNFs, and CNFs-starch as a binder on different scales and evaluated the effects of binder type and content on the panels’ physical, mechanical, and thermal properties. All panels had excellent thermal resistivity values, which increased with the decrease in density. The WIPs made with LCNFs as binder had lower mechanical properties, but it was possible to replace 20 % CNFs with LCNFs to obtain the same performance as neat CNFs as the binder. Untreated panels had poor water resistance but the water absorption properties were significantly improved with the addition wax. The WIPs made with 5 % and 7.5 % binder content and 2 % wax addition could fulfill the criteria of regular and structural wall sheathing applications, respectively. Overall, the results confirm the potential of CNFs and LCNFs to be used as 100 % bio-based adhesives to produce eco-friendly composite WIPs with excellent thermo-mechanical properties to be used for regular and structural wall sheathing applications.