Definitely cover with another stain. But why does it have to be light? It's enough to simply remove the yellowness from the wood and the medium tone should look great.

Solid walnut paneling like what you have would be worth a small fortune these days. I can understand your wanting a lighter, brighter interior but just can bring myself to advise you to paint it. Has the finish darkened over time? If so, maybe stripping it and refinishing with a clear stain might lighten it us some. The flooring that you choose will definitely influence the perceived color of the paneling. I very light floor will like make the paneling appear darker but am sure you don't want a really dark floor either. Will take some research on your part and will definitely suggest that you get a wide variety of flooring samples to select from.

I personally would paint some, leave some. NOT WHITE!

Definitely replace the carpet with the same flooring that you have throughout the main floor. Have you already started to remove some of the finishes?

As shown above by @housegal200 I find these 2 options can be quite nice, one with painted panelling, the other with the wood panelling. All depends on how you'll furnish the room.

IMO you are headed in the wrong direction.

All the wood paneling & built ins should be removed.

The beams should stay.

The carpet should be replaced with wood flooring.

It's gorgeous and in a room with a lot of windows. I'd keep it. Walnut is a darker wood. I'm not convinced you can "refinish with a lighter stain". The room doesn't look dark. You have a unique and luxurious feature, I'd treasure it.

The fact that the walnut paneling,to me, very much resembles flooring due to the walls being panelled with random lengths of wood, takes away any elegance.

I’m with Bev- rip it out , along with the overabundance of shelving.

You haven't mentioned budget so I'll make a suggestion without that in mind. I am also pained by painting over quality wood, but...it definitely sets the tone of the room and if you're ready for a change, now is the time.

How thick is the wood? Can it be carefully removed, taken to a very creative cabinet maker/furniture maker and have the wood made into something that you can use in the room? How much square footage do you have? Is it thick enough to become the floor?

What are your thoughts on the fireplace? What style are you going for?

Looks like a nice house. Can't quite tell what the drapes are made of, but that much yardage of a quality fabric is another small fortune sitting in the room. You're very fortunate they are a neutral.

My vote is to keep the bookcases and tear out the wall paneling. I wouldn't paint the bookcases yet but rather clean them up keeping same coloring or strip and re-stain to your liking.

You can put plain, light colored wallpaper on the back walls of the bookcases. I agree with considering a lighter floor and lighter furniture. It would be a shame to remove ALL the wood.
Re-staining wood is extremely difficult unless you’re experienced with doing it. And getting it lighter means bleaching out the initial stain. It’s easier to add light decor to a room like this.

Thanks for all of the ideas and feedback! We will close on the house in a couple of weeks and I’ll definitely spend some time weighing the options before diving in.

Task #1 will be to remove carpet throughout the house…which is literally throughout the house (even the kitchen and bathrooms). 😆

I will remove a panel from another wall we will be taking down and see how stripping/refinishing goes, if or how it could be reused elsewhere, etc.

This community has a wealth of advice to offer and I will surely seek your advice on several more areas to come 😁. Thanks again!

The paneling and built ins were not the right detail when the house was first built. No sense in keeping details that don't work just because they are original.

First those shelves need to go honestly what could you possibly fill those with ? Then if you kind of like the pannelling leave it in the rest of the space but drywall over those walls where th shelves were and add 2 awesome pieces of art there . For me the layout of the wood is awful so I would cover it all with 1/4" drywall and paint then add walnut floors which IMO are always awesome compared to oak for sure .

Do you have a close up of the panelling the size of a dinner plate or two to show the grain and color?

That is some bathroom! You have plenty to do just cleaning up the old finishes.

Everyone is so quick to suggest painting everything white. Once the floors are installed, you may rethink an all white look.

I am wondering what you will use that fireplace room for? Is it the only living room?

A game room? music room? TV viewing? Do the patio doors open to an outdoor living space? or just a narrow deck?

What is on the backside of the fireplace wall? the kitchen? bedrooms?

Congratulations, with a lot of work, this will be a beautiful home.

The best new homeowner advice I got was to WAIT. Collect ideas over time and learn more about your house. If you have the energy pull out the carpeting you hate and yank down offensive wallpaper.

I had major surgery and was diagnosed with cancer the week before I closed on my current home. In the weeks prior to needing surgery I had planned all the changes I wanted to make to my new home.

Due to the surgery (14" abdominal incision) and post surgery treatments I had a hard time even getting boxes unpacked. I wasn't tackling any renovations for a while.

While I lived in my home I started rethinking some of my plans. After 6 months my renovation plan had changed quite a bit. I found things that I thought I wouldn't like grew on me and things I didn't give a second thought really bothered me.

I wouldn't wish my illness and diagnosis on anyone, but the forced delay in renovation was a blessing in disguise. I don't think I would be nearly as happy with my decision had I rushed in and did things in a hurry.

Hi Jennifer, I've seen your name come across many comments since I've been on Houzz and just want to say I'm sorry to hear about your health issues. I hope everything goes well and that you'll soon find yourself in remission. Not easy going through that at any time but especially just prior to a move. Wishing you all the best!

@Jennifer Hogan - I’m sorry to hear of your surgery, but I hope your recovery is going well. Many of us appreciate your input on this website, so keep on commenting.

We did a whole house remodel after living in the home for 5 years. The home was disgusting, even had gold ”scultured” ( whatever ) carpet in the bathrooms! The first things we did was remove all the the carpeting, window coverings & had everything painted white, just to clean it up. I’m really glad we waited to do the major remodel ( down to the studs ) until after we lived there for those years. Many of our initial ideas changed dramatically during that time, for example, we opened up an entire living room wall, became a wall of glass, just to name one.