We analyzed the mechanism of degradation of waterlogged archaeological wood from Haimenkou Sites using scanning electron microscopy (SEM) and transmission electron microscopy (TEM). These observations show that the secondary walls of wood cells shrink very seriously and are separated from the intercellular layers, but that the latter remain relatively intact, presenting a continuous network. The results indicate that the degradation of cellulose and hemicellulose is serious while that of lignin is relatively mild. The archaeological wood suffers mainly from bacterial degradation which is demonstrated by significant bacterial decay characteristics as determined by SEM and TEM observation. Bacteria first invade the cell lumen, and then invade the cell wall through the S3 layer. The cell wall lacuna due to degradation varies between tens to hundreds of nanometers. The archaeological wood is also degraded by fungi to a certain degree. With weaker ability to degrade cell wall materials, such fungi mainly degrade starch and other substances, making archaeological wood darker.