Would you mind sharing some room dimensions? That will help us if we need to mock up some ideas for you. As for the paneling, I'm guessing once it's remove you will need to install drywall etc; are you looking for ideas/suggestions on types of finishes?

Depending on the furnishings (is bed staying? open to new drapery?) and house style, I love a wallpaper look. It's a small room though, and depending on wallpaper and other finishes this could be overpowering. Are you thinking wainscotting? If so, that would allow you to do a fun wallpaper or pop of color or print on the top portion.

If you have any other photos of your home to give an idea of your style, or any inspo pics of styles and rooms you love, that will help us make suggestions!

The room is about 20 by 16 feet. I tossed the drapes there are blinds I’m open to knew ones or new drapes. Not sure about wainscoting but thinking wood on Lower 2/3. Too 1/3 walpaper. Unsure if that’s ok or if it’s ok on all walls. Not the color in this picture but just idea for wood.

It is pretty random to toss wainscoting into just one room in a house. I know it is a big trend right now, but I can imagine that trend fading fast and then you are left with another outdated look. Do you have wainscoting in other rooms in your home?

I personally like your paneling. I'd find fantastic fabric for drapes and paint your current walls a great color to match. What colors and patterns are you drawn to?

The current paneling just isn’t in good shape really as for wainscoting if that’s what you call the wood in the pic I posted but our dining room does have something like that as least like a chair rail.

At least like a chair raik*

Rail. Oh my goodness can’t type this am!

Here is our dining room