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Despite its name, guaiac wood oil does not come from the Guaiacum tree, but from the palo santo tree (Bulnesia sarmientoi). Bulnesia sarmientoi is a tree that inhabits a part of the Gran Chaco area in South America, around the Argentina-Bolivia-Paraguay border. The name palo santo is ambiguous, because the species Bursera graveolens shares it. Palo santo is Spanish for holy stick. The wood of Bulnesia sarmientoi is often traded as Paraguay lignum vitae, since its properties and uses are similar to those of the true lignum vitae trees of the genus Guaiacum, which are close relatives. Palo santo wood is used for engraving work and for making durable wooden posts.

The oil is a yellow to greenish yellow semi-solid mass which melts around 40-50 °C. Once melted, it can be cooled back to room temperature yet remain liquid for a long time. It is sometimes incorrectly called guaiac wood concrete. It is considered non-irritating, non-sensitizing, and non-phototoxic to human skin.

Oil of guaiac is primarily composed of guaiol, bulnesol, δ-bulnesene, β-bulnesene, α-guaiene, guaioxide and β-patchoulene. Guaiol, also called champacol, is a sesquiterpenoid alcohol with the formula C₁₅H₂₆O. It is a crystalline solid that melts at 92 °C. Bulnesol has the same formula, C₁₅H₂₆O.

The heartwood of Bulnesia sarmientoi is brown, black and green, varying from light olive green to chocolate brown, with streaks, while the sapwood is mostly thin and light yellow. The basic specific gravity of the wood is between 0.92 and 1.1 g/cm³. The resin of the wood can be obtained with organic solvents and is used to make varnishes and dark paints. Palo santo wood has also been used in indigenous medicine in South America, and it provides good charcoal and high-quality timber. Small pieces of the wood are used as a natural incense in spiritual rituals.

Oil of guaiac was also a pre-Renaissance remedy to syphilis.

Bulnesia sarmientoi was listed as endangered in the 2018 publication of the IUCN Red List, due to the deforestation of Gran Chaco and a strong global demand for its wood, extracts, and essential oils since 2001. It has been listed in Appendix II of CITES since 2010.

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