The WWF report found Russia, China and Indonesia were the main sources, with the EU importing up to 31m cubic metres of wood from illegal origins.
Anke Schulmeister, WWF forest policy officer, said illegal logging pushes wood prices down resulting in "major economic losses for states".
"Strong measures are needed at EU level to protect the world's remaining forests and our own future," he said.
In Eastern Europe, 23% of wood-based products originated from illegal or suspect sources, 40% from South East Asia, 30% from Latin America and 36-56% from Africa. Major importers are Finland, UK, Germany and Italy.
WWF urges the introduction of EU legislation to guarantee that only legal wood is traded in the European market.
The European Commission is expected to propose legislation on this issue in the coming months.
Calls for action as WWF says one-fifth of wood 'illegally sourced'
WWF has called for the EU to bring into force strong measures to protect the world's remaining forests after a report found illegal logging is on the increase with one-fifth of wood in 2006 illegally sourced.
