The use of wood furnaces for thermal energy application in grain dryers is common in Brazil, however, contaminations of the products and environmental effects due to incomplete combustion and its excessive use in drying are major challenges. In this study, a wood furnace was designed, build and its performance was evaluated for mixed and indirect heating of the drying air. The design of the combustion chamber volume, combustion cell, grate area, and heat exchanger were based on the following demands: thermal energy from 15 to 30 kW (12,898 to 25,795 kcal. h -1 ), drying air flow rate from 35 to 45 m³ min -1 and drying air temperature from 50 to 80 °C. Considering experimental data, quadratic regression models were adjusted to describe the temperatures in furnace compartments. These regressions were used to develop a simulation model using Extend TM simulation language to predict the performance of the furnace considering the desired drying air temperature. To determine the efficiency, furnace operation was simulated considering four drying air temperatures 50, 60, 70, and 80 °C, and six combinations of operation times in mixed and indirect heating during 0 and 119 min, 5 and 114 min, 10 and 109 min, 15 and 104 min, 20 and 99 min, and 30 and 89 min, respectively. The simulation result shows that for mixed and indirect heating of 5 and 114 min, respectively, the best outcomes for drying air temperatures of 50, 60, and 70 °C were the efficiency of 32, 44, and 55%, during 99.2, 98.4, and 95.5% of operation time. However, the best outcome was the efficiency of 64% during 93.5% of operating time using the drying air temperature of 80 °C and mixed and indirect heating during 10 and 109 min, respectively. Keywords: Eucalyptus. Combustion. Indirect and mixed heating. Modeling and simulation. Thermal efficiency.