The aim of the present study was to investigate the effect of moisture content and temperature on the fracture behaviour of thermally modified Norway spruce (Picea abies [L.] Karst.) in the transverse plane. Spruce was thermally modified at two heat treatment temperatures, 190 and 210 °C. Mode I fracture tests were carried out at temperatures of 22 and 50 °C on air-dried and fully water-saturated (>fibre saturation point) material. Small CT specimens were used, and load–CMOD curves were recorded. Characteristic fracture parameters were calculated. The fracture surfaces were subsequently examined using optical microscopy. Thermal modification altered all the calculated fracture parameter values and the changes increased as the severity of heat treatment increased. The parameters were altered more in the radial-tangential (RT) than in tangential-radial (TR) orientation. The failure mode changed due to heat treatment in the TR orientation but in the RT orientation the failure mode of unmodified and heat treated material differs only at high moisture content and elevated temperature.