There are four main weaknesses in using Oil Palm Stem (OPS) as a material for plywood manufacturing. High variation in density, moisture contents (MC), high water absorption and surface roughness. This paper report the investigation on the effect of water on physical properties of OPS plywood (PTA) namely water absorption, thickness swelling and delamination. These properties were compared with the properties of another two types of commercial OPS plywood denoted as PTB and PTC which were manufactured using OPS veneer with tropical hardwood veneer for face and back veneer and control plywood denoted as PTD which was manufactured using 100% tropical hardwood veneer. The results showed that PTA has lowest value of water absorption but has highest value of thickness swelling and delaminating.