Wormy Chestnut is not a distinct species of Chestnut, but rather refers to American Chestnut (Castanea dentata) trees that were killed by the chestnut blight of the early 1900s, which were subsequently damaged by insects, leaving holes and discoloration in the standing trees. The trees were then subsequently harvested and converted into lumber.
Because of the blight wiping out nearly all mature American Chestnut trees, its lumber is both rare and (relatively) valuable. Wormy Chestnut in particular is usually salvaged from old barns and other structures, and reprocessed and sold as reclaimed lumber. Between the nail holes, discoloration, worm and insect damage, Wormy Chestnut is preferred in applications where a rustic or unpolished appearance is desired.