Walls and Ceilings - MDF or Plywood beadboard panels in bath?

I have a small 8 x 10 bath with a soaking tub and handheld shower sprayer. There is a box around the tub. I want beadboard to run 44 inches up the walls and behind the tub as well as on the tub box. What is the best material to use for the beadboard? MDF or plywood? I know that I should painte all edges of the material. What else do I need to do to properly prepare the material?

From what I've seen "real" wood withstands moisture best. MDF and plywood tend to delaminate and swell when wet.

Real T&G wood would be great, but expensive. I would go with the plywood based beadboard, though I have seen the inexpensive 1/8" thick MDF beadboard hold up pretty well.

Don't let your real wood, MDF or plywood beadboard paneling touch the floor or the box around your soaking tub. Use some nails or paint stirrers as shims to hold your beadboard off the floor. That way water cannot wick up into the panelling. Basically try to keep water and humidity away from the panelling as much as possible. The materials you mentioned are not good for a shower stall, but are generally OK around a soaking tub.

A good paint job always helps. Never spray or splash water on the panelling and try to keep the moisture/humidity in the room under controll (use a vent fan & leave the door open after your bath to vent-out the room).

I like your idea of the shims to keep the 1/4" off the floor or tub box. I also got some of that PVC base cap molding to put up against the MDF (which I purchased).