The nonvolatile and nontoxic aldehyde glyoxal (G) was chosen to react with monomethylol urea (MMU) to prepare a glyoxal-monomethylol urea (G-MMU) resin. The basic properties of the resin and bonding strength of bonded plywood panels were tested. The reaction mechanism of the addition of G to MMU was investigated theoretically at the BLYP/DND/COSMO level of quantum chemistry using density functional theory (DFT) method. The results showed that the addition reaction of G with MMU under weakly acidic conditions mainly involves the reactions of MMU with protonated glyoxal (p-G), protonated 2,2-dihydroxyacetaldehyde (p-G1), and protonated bis-hemidiol (p-G2) to form the two important reactive carbocation intermediates C-p-G MMU and C-p-G1-MMU and the two important hydroxyl compounds N-p-G-MMU and N-p-G1-MMU. The G-MMU resin was characterized by FTIR and C-13 NMR spectroscopies, and the results were found to be quite compatible with those obtained by quantum chemical calculations. Based on the theoretical and experimental results, polycondensation reactions for G-MMU resin are proposed.