SUMMARYThe construction sector continues to adapt to the challenges posed by climate change. Architects and engineers aim to build sustainable, energy, resource, and cost‐efficient structures by increasingly using bio‐based building materials. However, fire safety has always been a significant concern for timber building construction internationally. The objective of the study presented in this article is to document fire hazards of compressed straw when used as thermal and acoustic insulation within wood‐framed building assemblies. Three densities of compressed straw (75, 125, and 175 kg/m3) were selected and their combustion and thermal responses were evaluated at various scales, in attempt to define the optimal density considering various factors. The performance of the straw was also compared with commercially available insulation materials and then tested under exposure to severe heating in medium‐scale wood‐framed assemblies to evaluate the impacts of the straw as compared with a noncombustible insulation. The compressed straw with a density of 75 kg/m3 was found to have the best behavior with respect to both reactions to fire and insulation properties. The results suggest that compressed may have similar or better behavior under the heating conditions investigated when compared to a commercially available combustible insulation material. The use of this material as a primary insulation in a buildings is considered manageable by thoughtful design, construction, and building use without unduly increasing risks associated with fire.