Year after year, water-based coatings gain market share due to new regulations on volatile organic compound emissions and voluntary certification programs. Work still has to be done on wood surface preparation, however, for water-based finishes to become truly reliable. In this research, water-based and solvent-based coatings were applied to edge-glued panels of yellow birch (Betula alleghaniensis Brit.). Sandpaper grits from 150 to 280 were used to prepare wood surfaces prior to coating application. A first series of specimens was prepared with a wiping stain and a second series with a spray stain. Contact angle measurements showed that surface preparation—more precisely the sandpaper grit—strongly affects water wettability and hence coating adhesion. Adhesion was found to change with the contact angle of the water. It was found that using a 150-grit sandpaper leads to unfilled wood cavities, high contact angles, and poor coating adhesion. At the opposite end of the range, using a 180-grit sandpaper leads to good wetting and good adhesion. In our tests, surface preparation had no significant effect on the color of systems using a spray stain. With a wiping stain, however, the grit of the sandpaper was found to affect the color of the specimens.